Correlation Between Media and MAANSHAN IRON

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

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

Diversification Opportunities for Media and MAANSHAN IRON

-0.79

Correlation Coefficient

Media  MAANSHAN IRON

Pay attention - limited upside

The 3 months correlation between Media and MAANSHAN is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and MAANSHAN IRON H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAANSHAN IRON H and 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 Media and Games are associated (or correlated) with MAANSHAN IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAANSHAN IRON H has no effect on the direction of Media i.e., Media and MAANSHAN IRON go up and down completely randomly.

Pair Corralation between Media and MAANSHAN IRON

Assuming the 90 days trading horizon Media and Games is expected to under-perform the MAANSHAN IRON. But the stock apears to be less risky and, when comparing its historical volatility, Media and Games is 1.16 times less risky than MAANSHAN IRON. The stock trades about -0.02 of its potential returns per unit of risk. The MAANSHAN IRON H is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  17.00  in MAANSHAN IRON H on October 25, 2024 and sell it today you would earn a total of  4.00  from holding MAANSHAN IRON H or generate 23.53% return on investment over 90 days.

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

Media and Games  vs.  MAANSHAN IRON H

Media and Games

Risk-Adjusted Performance

0 of 100

Very Weak

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

MAANSHAN IRON H

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MAANSHAN IRON H are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MAANSHAN IRON unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Media and MAANSHAN IRON

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

The idea behind Media and Games and MAANSHAN IRON H 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.