Correlation Between Color Star and VS Media

Can any of the company-specific risk be diversified away by investing in both Color Star and VS Media at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Color Star and VS Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Color Star Technology and VS Media Holdings, you can compare the effects of market volatilities on Color Star and VS Media and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Color Star with a short position of VS Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Color Star and VS Media.

Diversification Opportunities for Color Star and VS Media

-0.14

Correlation Coefficient

Color Star  VS Media

Good diversification

The 3 months correlation between Color and VSME is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Color Star Technology and VS Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VS Media Holdings and Color Star is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Color Star Technology are associated (or correlated) with VS Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VS Media Holdings has no effect on the direction of Color Star i.e., Color Star and VS Media go up and down completely randomly.

Pair Corralation between Color Star and VS Media

Considering the 90-day investment horizon Color Star Technology is expected to under-perform the VS Media. In addition to that, Color Star is 1.21 times more volatile than VS Media Holdings. It trades about -0.2 of its total potential returns per unit of risk. VS Media Holdings is currently generating about -0.01 per unit of volatility. If you would invest  119.00  in VS Media Holdings on December 1, 2024 and sell it today you would lose (18.00) from holding VS Media Holdings or give up 15.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Color Star Technology  vs.  VS Media Holdings

Color Star Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Color Star Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

VS Media Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days VS Media Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, VS Media is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Color Star and VS Media

The main advantage of trading using opposite Color Star and VS Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Color Star position performs unexpectedly, VS Media can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in VS Media will offset losses from the drop in VS Media's long position.

The idea behind Color Star Technology and VS Media Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.