Correlation Between Inly Media and Shenzhen MYS

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

By analyzing existing cross correlation between Inly Media Co and Shenzhen MYS Environmental, you can compare the effects of market volatilities on Inly Media and Shenzhen MYS 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 Inly Media with a short position of Shenzhen MYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inly Media and Shenzhen MYS.

Diversification Opportunities for Inly Media and Shenzhen MYS

0.86

Correlation Coefficient

Inly Media  Shenzhen MYS

Very poor diversification

The 3 months correlation between Inly and Shenzhen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Inly Media Co and Shenzhen MYS Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen MYS Environ and Inly 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 Inly Media Co are associated (or correlated) with Shenzhen MYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen MYS Environ has no effect on the direction of Inly Media i.e., Inly Media and Shenzhen MYS go up and down completely randomly.

Pair Corralation between Inly Media and Shenzhen MYS

Assuming the 90 days trading horizon Inly Media Co is expected to generate 1.23 times more return on investment than Shenzhen MYS. However, Inly Media is 1.23 times more volatile than Shenzhen MYS Environmental. It trades about 0.28 of its potential returns per unit of risk. Shenzhen MYS Environmental is currently generating about 0.25 per unit of risk. If you would invest  1,118  in Inly Media Co on September 15, 2024 and sell it today you would earn a total of  1,127  from holding Inly Media Co or generate 100.81% return on investment over 90 days.

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

Inly Media Co  vs.  Shenzhen MYS Environmental

Inly Media

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Inly Media Co are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Inly Media sustained solid returns over the last few months and may actually be approaching a breakup point.

Shenzhen MYS Environ

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen MYS Environmental are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen MYS sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inly Media and Shenzhen MYS

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

The idea behind Inly Media Co and Shenzhen MYS Environmental 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.