Correlation Between Clear Media and Tencent Holdings
Can any of the company-specific risk be diversified away by investing in both Clear Media and Tencent Holdings 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 Clear Media and Tencent Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clear Media Limited and Tencent Holdings, you can compare the effects of market volatilities on Clear Media and Tencent Holdings 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 Clear Media with a short position of Tencent Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clear Media and Tencent Holdings.
Diversification Opportunities for Clear Media and Tencent Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Clear and Tencent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Clear Media Limited and Tencent Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tencent Holdings and Clear 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 Clear Media Limited are associated (or correlated) with Tencent Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tencent Holdings has no effect on the direction of Clear Media i.e., Clear Media and Tencent Holdings go up and down completely randomly.
Pair Corralation between Clear Media and Tencent Holdings
If you would invest 3,760 in Tencent Holdings on January 26, 2024 and sell it today you would earn a total of 595.00 from holding Tencent Holdings or generate 15.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Clear Media Limited vs. Tencent Holdings
Performance |
Timeline |
Clear Media Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tencent Holdings |
Clear Media and Tencent Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Clear Media and Tencent Holdings
The main advantage of trading using opposite Clear Media and Tencent Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clear Media position performs unexpectedly, Tencent Holdings 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 Tencent Holdings will offset losses from the drop in Tencent Holdings' long position.Clear Media vs. Radcom | Clear Media vs. BCE Inc | Clear Media vs. Merit Medical Systems | Clear Media vs. Reynolds Consumer Products |
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Check out your portfolio center.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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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