Correlation Between Baosheng Media and CyberAgent

Can any of the company-specific risk be diversified away by investing in both Baosheng Media and CyberAgent 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 Baosheng Media and CyberAgent into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Baosheng Media Group and CyberAgent ADR, you can compare the effects of market volatilities on Baosheng Media and CyberAgent 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 Baosheng Media with a short position of CyberAgent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baosheng Media and CyberAgent.

Diversification Opportunities for Baosheng Media and CyberAgent

-0.1

Correlation Coefficient

Baosheng Media  CyberAgent

Good diversification

The 3 months correlation between Baosheng and CyberAgent is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Baosheng Media Group and CyberAgent ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent ADR and Baosheng Media 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 Baosheng Media Group are associated (or correlated) with CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent ADR has no effect on the direction of Baosheng Media i.e., Baosheng Media and CyberAgent go up and down completely randomly.

Pair Corralation between Baosheng Media and CyberAgent

Given the investment horizon of 90 days Baosheng Media Group is expected to generate 22.92 times more return on investment than CyberAgent. However, Baosheng Media is 22.92 times more volatile than CyberAgent ADR. It trades about 0.1 of its potential returns per unit of risk. CyberAgent ADR is currently generating about 0.01 per unit of risk. If you would invest  209.00  in Baosheng Media Group on October 22, 2024 and sell it today you would earn a total of  129.00  from holding Baosheng Media Group or generate 61.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Baosheng Media Group  vs.  CyberAgent ADR

Baosheng Media Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baosheng Media Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Baosheng Media unveiled solid returns over the last few months and may actually be approaching a breakup point.

CyberAgent ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CyberAgent ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, CyberAgent is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Baosheng Media and CyberAgent

The main advantage of trading using opposite Baosheng Media and CyberAgent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baosheng Media position performs unexpectedly, CyberAgent 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 CyberAgent will offset losses from the drop in CyberAgent's long position.

The idea behind Baosheng Media Group and CyberAgent ADR 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.