Correlation Between Creative Media and Wilhelmina

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

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

Diversification Opportunities for Creative Media and Wilhelmina

-0.13

Correlation Coefficient

Creative Media  Wilhelmina

Good diversification

The 3 months correlation between Creative and Wilhelmina is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Creative Media Community and Wilhelmina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilhelmina and Creative 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 Creative Media Community are associated (or correlated) with Wilhelmina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilhelmina has no effect on the direction of Creative Media i.e., Creative Media and Wilhelmina go up and down completely randomly.

Pair Corralation between Creative Media and Wilhelmina

Given the investment horizon of 90 days Creative Media Community is expected to under-perform the Wilhelmina. In addition to that, Creative Media is 1.32 times more volatile than Wilhelmina. It trades about -0.12 of its total potential returns per unit of risk. Wilhelmina is currently generating about 0.01 per unit of volatility. If you would invest  455.00  in Wilhelmina on October 25, 2024 and sell it today you would lose (104.00) from holding Wilhelmina or give up 22.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.96%
Values	Daily Returns

Creative Media Community  vs.  Wilhelmina

Creative Media Community

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creative Media Community 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 comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Wilhelmina

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wilhelmina are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Wilhelmina may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Creative Media and Wilhelmina

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

The idea behind Creative Media Community and Wilhelmina 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.