Correlation Between Isras Investment and Creative Media

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

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

Diversification Opportunities for Isras Investment and Creative Media

-0.77

Correlation Coefficient

Isras Investment  Creative Media

Pay attention - limited upside

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

Pair Corralation between Isras Investment and Creative Media

Assuming the 90 days trading horizon Isras Investment is expected to under-perform the Creative Media. But the stock apears to be less risky and, when comparing its historical volatility, Isras Investment is 12.49 times less risky than Creative Media. The stock trades about -0.03 of its potential returns per unit of risk. The Creative Media Community is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  7,600  in Creative Media Community on October 7, 2024 and sell it today you would earn a total of  1,950  from holding Creative Media Community or generate 25.66% return on investment over 90 days.

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

Isras Investment  vs.  Creative Media Community

Isras Investment

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Isras Investment are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Isras Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

Creative Media Community

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creative Media Community has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Isras Investment and Creative Media

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

The idea behind Isras Investment and Creative Media Community 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.