Correlation Between Cumulus Media and Skillful Craftsman

Can any of the company-specific risk be diversified away by investing in both Cumulus Media and Skillful Craftsman 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 Skillful Craftsman 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 Skillful Craftsman Education, you can compare the effects of market volatilities on Cumulus Media and Skillful Craftsman 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 Skillful Craftsman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and Skillful Craftsman.

Diversification Opportunities for Cumulus Media and Skillful Craftsman

0.19

Correlation Coefficient

Cumulus Media  Skillful Craftsman

Average diversification

The 3 months correlation between Cumulus and Skillful is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and Skillful Craftsman Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skillful Craftsman 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 Skillful Craftsman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skillful Craftsman has no effect on the direction of Cumulus Media i.e., Cumulus Media and Skillful Craftsman go up and down completely randomly.

Pair Corralation between Cumulus Media and Skillful Craftsman

Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the Skillful Craftsman. In addition to that, Cumulus Media is 2.2 times more volatile than Skillful Craftsman Education. It trades about -0.06 of its total potential returns per unit of risk. Skillful Craftsman Education is currently generating about 0.02 per unit of volatility. If you would invest  100.00  in Skillful Craftsman Education on December 30, 2024 and sell it today you would earn a total of  1.00  from holding Skillful Craftsman Education or generate 1.0% return on investment over 90 days.

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

Cumulus Media Class  vs.  Skillful Craftsman Education

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 weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Skillful Craftsman

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Skillful Craftsman Education are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Skillful Craftsman is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cumulus Media and Skillful Craftsman

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

The idea behind Cumulus Media Class and Skillful Craftsman Education 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 Global Correlations module to find global opportunities by holding instruments from different markets.