Correlation Between Cinedigm Corp and Color Star

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

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

Diversification Opportunities for Cinedigm Corp and Color Star

0.43

Correlation Coefficient

Cinedigm Corp  Color Star

Very weak diversification

The 3 months correlation between Cinedigm and Color is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cinedigm Corp and Color Star Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Color Star Technology and Cinedigm Corp 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 Cinedigm Corp are associated (or correlated) with Color Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Color Star Technology has no effect on the direction of Cinedigm Corp i.e., Cinedigm Corp and Color Star go up and down completely randomly.

Pair Corralation between Cinedigm Corp and Color Star

If you would invest  29.00  in Cinedigm Corp on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Cinedigm Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Cinedigm Corp  vs.  Color Star Technology

Cinedigm Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cinedigm Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Cinedigm Corp is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Color Star Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Color Star Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Cinedigm Corp and Color Star

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

The idea behind Cinedigm Corp and Color Star Technology 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.