Correlation Between Crescent Star and Media Times

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

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

Diversification Opportunities for Crescent Star and Media Times

0.77

Correlation Coefficient

Crescent Star  Media Times

Poor diversification

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

Pair Corralation between Crescent Star and Media Times

Assuming the 90 days trading horizon Crescent Star Insurance is expected to generate 0.78 times more return on investment than Media Times. However, Crescent Star Insurance is 1.28 times less risky than Media Times. It trades about -0.06 of its potential returns per unit of risk. Media Times is currently generating about -0.05 per unit of risk. If you would invest  299.00  in Crescent Star Insurance on December 23, 2024 and sell it today you would lose (25.00) from holding Crescent Star Insurance or give up 8.36% of portfolio value over 90 days.

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

Crescent Star Insurance  vs.  Media Times

Crescent Star Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crescent Star Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Media Times

Risk-Adjusted Performance

Very Weak

Over the last 90 days Media Times has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Crescent Star and Media Times

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

The idea behind Crescent Star Insurance and Media Times 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.

Check out your portfolio center.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.