Correlation Between Yuexiu Transport and Cineverse Corp

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

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

Diversification Opportunities for Yuexiu Transport and Cineverse Corp

0.86

Correlation Coefficient

Yuexiu Transport  Cineverse Corp

Very poor diversification

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

Pair Corralation between Yuexiu Transport and Cineverse Corp

Assuming the 90 days horizon Yuexiu Transport is expected to generate 2.71 times less return on investment than Cineverse Corp. But when comparing it to its historical volatility, Yuexiu Transport Infrastructure is 2.53 times less risky than Cineverse Corp. It trades about 0.09 of its potential returns per unit of risk. Cineverse Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  106.00  in Cineverse Corp on September 14, 2024 and sell it today you would earn a total of  267.00  from holding Cineverse Corp or generate 251.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.63%
Values	Daily Returns

Yuexiu Transport Infrastructur  vs.  Cineverse Corp

Yuexiu Transport Inf

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yuexiu Transport Infrastructure are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Yuexiu Transport reported solid returns over the last few months and may actually be approaching a breakup point.

Cineverse Corp

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cineverse Corp are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cineverse Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yuexiu Transport and Cineverse Corp

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

The idea behind Yuexiu Transport Infrastructure and Cineverse Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.