Correlation Between CNVISION MEDIA and WESTERN NEW

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

By analyzing existing cross correlation between CNVISION MEDIA and WESTERN NEW ENGL, you can compare the effects of market volatilities on CNVISION MEDIA and WESTERN NEW 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 CNVISION MEDIA with a short position of WESTERN NEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and WESTERN NEW.

Diversification Opportunities for CNVISION MEDIA and WESTERN NEW

0.1

Correlation Coefficient

CNVISION MEDIA  WESTERN NEW

Average diversification

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

Pair Corralation between CNVISION MEDIA and WESTERN NEW

Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 1.84 times more return on investment than WESTERN NEW. However, CNVISION MEDIA is 1.84 times more volatile than WESTERN NEW ENGL. It trades about 0.09 of its potential returns per unit of risk. WESTERN NEW ENGL is currently generating about 0.13 per unit of risk. If you would invest  5.20  in CNVISION MEDIA on October 25, 2024 and sell it today you would earn a total of  0.70  from holding CNVISION MEDIA or generate 13.46% return on investment over 90 days.

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

CNVISION MEDIA  vs.  WESTERN NEW ENGL

CNVISION MEDIA

Risk-Adjusted Performance

7 of 100

OK

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

WESTERN NEW ENGL

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WESTERN NEW ENGL are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, WESTERN NEW may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CNVISION MEDIA and WESTERN NEW

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

The idea behind CNVISION MEDIA and WESTERN NEW ENGL 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.