Correlation Between CNVISION MEDIA and Yamaha

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

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

Diversification Opportunities for CNVISION MEDIA and Yamaha

-0.16

Correlation Coefficient

CNVISION MEDIA  Yamaha

Good diversification

The 3 months correlation between CNVISION and Yamaha is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding CNVISION MEDIA and Yamaha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yamaha and CNVISION 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 CNVISION MEDIA are associated (or correlated) with Yamaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yamaha has no effect on the direction of CNVISION MEDIA i.e., CNVISION MEDIA and Yamaha go up and down completely randomly.

Pair Corralation between CNVISION MEDIA and Yamaha

Assuming the 90 days trading horizon CNVISION MEDIA is expected to generate 1.47 times more return on investment than Yamaha. However, CNVISION MEDIA is 1.47 times more volatile than Yamaha. It trades about 0.14 of its potential returns per unit of risk. Yamaha is currently generating about -0.04 per unit of risk. If you would invest  4.05  in CNVISION MEDIA on September 23, 2024 and sell it today you would earn a total of  1.45  from holding CNVISION MEDIA or generate 35.8% return on investment over 90 days.

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

CNVISION MEDIA  vs.  Yamaha

CNVISION MEDIA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CNVISION MEDIA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, CNVISION MEDIA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Yamaha

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with CNVISION MEDIA and Yamaha

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

The idea behind CNVISION MEDIA and Yamaha 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.