Correlation Between Cineverse Corp and Roku

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

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

Diversification Opportunities for Cineverse Corp and Roku

0.59

Correlation Coefficient

Cineverse Corp  Roku

Very weak diversification

The 3 months correlation between Cineverse and Roku is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cineverse Corp and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc and Cineverse Corp 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 Cineverse Corp are associated (or correlated) with Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of Cineverse Corp i.e., Cineverse Corp and Roku go up and down completely randomly.

Pair Corralation between Cineverse Corp and Roku

Given the investment horizon of 90 days Cineverse Corp is expected to under-perform the Roku. In addition to that, Cineverse Corp is 1.14 times more volatile than Roku Inc. It trades about -0.04 of its total potential returns per unit of risk. Roku Inc is currently generating about 0.01 per unit of volatility. If you would invest  7,489  in Roku Inc on December 29, 2024 and sell it today you would lose (240.00) from holding Roku Inc or give up 3.2% of portfolio value over 90 days.

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

Cineverse Corp  vs.  Roku Inc

Cineverse Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cineverse Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Roku Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roku Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Roku is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cineverse Corp and Roku

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

The idea behind Cineverse Corp and Roku Inc 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.