Correlation Between Gold Road and CNVISION MEDIA

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

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

Diversification Opportunities for Gold Road and CNVISION MEDIA

0.33

Correlation Coefficient

Gold Road  CNVISION MEDIA

Weak diversification

The 3 months correlation between Gold and CNVISION is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and CNVISION MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNVISION MEDIA and Gold Road 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 Gold Road Resources 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 Gold Road i.e., Gold Road and CNVISION MEDIA go up and down completely randomly.

Pair Corralation between Gold Road and CNVISION MEDIA

Assuming the 90 days horizon Gold Road is expected to generate 1.56 times less return on investment than CNVISION MEDIA. But when comparing it to its historical volatility, Gold Road Resources is 1.72 times less risky than CNVISION MEDIA. It trades about 0.16 of its potential returns per unit of risk. CNVISION MEDIA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  4.00  in CNVISION MEDIA on September 20, 2024 and sell it today you would earn a total of  1.55  from holding CNVISION MEDIA or generate 38.75% return on investment over 90 days.

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

Gold Road Resources  vs.  CNVISION MEDIA

Gold Road Resources

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Road Resources are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gold Road reported solid returns over the last few months and may actually be approaching a breakup point.

CNVISION MEDIA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CNVISION MEDIA are ranked lower than 11 (%) 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.

Pair Trading with Gold Road and CNVISION MEDIA

The main advantage of trading using opposite Gold Road and CNVISION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road 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 Gold Road Resources 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 CEOs Directory module to screen CEOs from public companies around the world.