Correlation Between Cumulus Media and Curiositystream

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

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

Diversification Opportunities for Cumulus Media and Curiositystream

0.77

Correlation Coefficient

Cumulus Media  Curiositystream

Poor diversification

The 3 months correlation between Cumulus and Curiositystream is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and Curiositystream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curiositystream and Cumulus 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 Cumulus Media Class are associated (or correlated) with Curiositystream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curiositystream has no effect on the direction of Cumulus Media i.e., Cumulus Media and Curiositystream go up and down completely randomly.

Pair Corralation between Cumulus Media and Curiositystream

Given the investment horizon of 90 days Cumulus Media is expected to generate 22.12 times less return on investment than Curiositystream. In addition to that, Cumulus Media is 1.14 times more volatile than Curiositystream. It trades about 0.01 of its total potential returns per unit of risk. Curiositystream is currently generating about 0.14 per unit of volatility. If you would invest  183.00  in Curiositystream on December 1, 2024 and sell it today you would earn a total of  74.00  from holding Curiositystream or generate 40.44% return on investment over 90 days.

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

Cumulus Media Class  vs.  Curiositystream

Cumulus Media Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cumulus Media Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Cumulus Media is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Curiositystream

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Curiositystream are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Curiositystream demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cumulus Media and Curiositystream

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

The idea behind Cumulus Media Class and Curiositystream 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.