Correlation Between Stewart Information and CNVISION MEDIA

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

By analyzing existing cross correlation between Stewart Information Services and CNVISION MEDIA, you can compare the effects of market volatilities on Stewart Information and CNVISION 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 Stewart Information with a short position of CNVISION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stewart Information and CNVISION MEDIA.

Diversification Opportunities for Stewart Information and CNVISION MEDIA

-0.29

Correlation Coefficient

Stewart Information  CNVISION MEDIA

Very good diversification

The 3 months correlation between Stewart and CNVISION is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Information Services and CNVISION MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNVISION MEDIA and Stewart Information 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 Stewart Information Services are associated (or correlated) with CNVISION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNVISION MEDIA has no effect on the direction of Stewart Information i.e., Stewart Information and CNVISION MEDIA go up and down completely randomly.

Pair Corralation between Stewart Information and CNVISION MEDIA

Assuming the 90 days horizon Stewart Information Services is expected to generate 0.75 times more return on investment than CNVISION MEDIA. However, Stewart Information Services is 1.33 times less risky than CNVISION MEDIA. It trades about 0.03 of its potential returns per unit of risk. CNVISION MEDIA is currently generating about 0.0 per unit of risk. If you would invest  6,155  in Stewart Information Services on October 6, 2024 and sell it today you would earn a total of  95.00  from holding Stewart Information Services or generate 1.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.5%
Values	Daily Returns

Stewart Information Services  vs.  CNVISION MEDIA

Stewart Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stewart Information Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Stewart Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CNVISION MEDIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CNVISION MEDIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Stewart Information and CNVISION MEDIA

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

The idea behind Stewart Information Services and CNVISION MEDIA 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.