Correlation Between Network Media and Genius Brands

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

By analyzing existing cross correlation between Network Media Group and Genius Brands International, you can compare the effects of market volatilities on Network Media and Genius Brands 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 Network Media with a short position of Genius Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network Media and Genius Brands.

Diversification Opportunities for Network Media and Genius Brands

-0.2

Correlation Coefficient

Network Media  Genius Brands

Good diversification

The 3 months correlation between Network and Genius is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Network Media Group and Genius Brands International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Brands Intern and Network 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 Network Media Group are associated (or correlated) with Genius Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Brands Intern has no effect on the direction of Network Media i.e., Network Media and Genius Brands go up and down completely randomly.

Pair Corralation between Network Media and Genius Brands

If you would invest  324.00  in Genius Brands International on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Genius Brands International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Network Media Group  vs.  Genius Brands International

Network Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Network Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Genius Brands Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genius Brands International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Genius Brands is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Network Media and Genius Brands

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

The idea behind Network Media Group and Genius Brands International 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.