Correlation Between Impact Fusion and Baosheng Media

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

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

Diversification Opportunities for Impact Fusion and Baosheng Media

-0.49

Correlation Coefficient

Impact Fusion  Baosheng Media

Very good diversification

The 3 months correlation between Impact and Baosheng is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Impact Fusion International and Baosheng Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baosheng Media Group and Impact Fusion 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 Impact Fusion International are associated (or correlated) with Baosheng Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baosheng Media Group has no effect on the direction of Impact Fusion i.e., Impact Fusion and Baosheng Media go up and down completely randomly.

Pair Corralation between Impact Fusion and Baosheng Media

Given the investment horizon of 90 days Impact Fusion International is expected to generate 0.98 times more return on investment than Baosheng Media. However, Impact Fusion International is 1.02 times less risky than Baosheng Media. It trades about 0.18 of its potential returns per unit of risk. Baosheng Media Group is currently generating about -0.02 per unit of risk. If you would invest  4.50  in Impact Fusion International on December 29, 2024 and sell it today you would earn a total of  5.50  from holding Impact Fusion International or generate 122.22% return on investment over 90 days.

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

Impact Fusion International  vs.  Baosheng Media Group

Impact Fusion Intern

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Impact Fusion International are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Impact Fusion unveiled solid returns over the last few months and may actually be approaching a breakup point.

Baosheng Media Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baosheng Media Group 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.

Pair Trading with Impact Fusion and Baosheng Media

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

The idea behind Impact Fusion International and Baosheng Media Group 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.