Correlation Between CNVISION MEDIA and SSP Group

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

By analyzing existing cross correlation between CNVISION MEDIA and SSP Group PLC, you can compare the effects of market volatilities on CNVISION MEDIA and SSP Group 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 SSP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNVISION MEDIA and SSP Group.

Diversification Opportunities for CNVISION MEDIA and SSP Group

0.2

Correlation Coefficient

CNVISION MEDIA  SSP Group

Modest diversification

The 3 months correlation between CNVISION and SSP is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA and SSP Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSP Group PLC 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 SSP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSP Group PLC has no effect on the direction of CNVISION MEDIA i.e., CNVISION MEDIA and SSP Group go up and down completely randomly.

Pair Corralation between CNVISION MEDIA and SSP Group

Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 1.6 times more return on investment than SSP Group. However, CNVISION MEDIA is 1.6 times more volatile than SSP Group PLC. It trades about 0.24 of its potential returns per unit of risk. SSP Group PLC is currently generating about -0.02 per unit of risk. If you would invest  4.90  in CNVISION MEDIA on October 5, 2024 and sell it today you would earn a total of  0.60  from holding CNVISION MEDIA or generate 12.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.44%
Values	Daily Returns

CNVISION MEDIA  vs.  SSP Group PLC

CNVISION MEDIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CNVISION MEDIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

SSP Group PLC

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SSP Group PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SSP Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CNVISION MEDIA and SSP Group

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

The idea behind CNVISION MEDIA and SSP Group PLC 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.