Correlation Between New Wave and Cineverse Corp

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

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

Diversification Opportunities for New Wave and Cineverse Corp

-0.2

Correlation Coefficient

New Wave  Cineverse Corp

Good diversification

The 3 months correlation between New and Cineverse is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding New Wave Holdings and Cineverse Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cineverse Corp and New Wave 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 New Wave Holdings 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 New Wave i.e., New Wave and Cineverse Corp go up and down completely randomly.

Pair Corralation between New Wave and Cineverse Corp

Assuming the 90 days horizon New Wave is expected to generate 1.04 times less return on investment than Cineverse Corp. In addition to that, New Wave is 3.51 times more volatile than Cineverse Corp. It trades about 0.09 of its total potential returns per unit of risk. Cineverse Corp is currently generating about 0.33 per unit of volatility. If you would invest  76.00  in Cineverse Corp on September 12, 2024 and sell it today you would earn a total of  270.00  from holding Cineverse Corp or generate 355.26% return on investment over 90 days.

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

New Wave Holdings  vs.  Cineverse Corp

New Wave Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in New Wave Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, New Wave reported solid returns over the last few months and may actually be approaching a breakup point.

Cineverse Corp

Risk-Adjusted Performance

25 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cineverse Corp are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Cineverse Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with New Wave and Cineverse Corp

The main advantage of trading using opposite New Wave and Cineverse Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Wave 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 New Wave Holdings 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.