Correlation Between Clear Media and Waters

Can any of the company-specific risk be diversified away by investing in both Clear Media and Waters 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 Waters 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 Waters, you can compare the effects of market volatilities on Clear Media and Waters 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 Waters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clear Media and Waters.

Diversification Opportunities for Clear Media and Waters

0.0

Correlation Coefficient

Clear Media  Waters

Pay attention - limited upside

The 3 months correlation between Clear and Waters is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Clear Media Limited and Waters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waters 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 Waters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waters has no effect on the direction of Clear Media i.e., Clear Media and Waters go up and down completely randomly.

Pair Corralation between Clear Media and Waters

If you would invest (100.00) in Clear Media Limited on February 2, 2024 and sell it today you would earn a total of  100.00  from holding Clear Media Limited or generate -100.0% 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.  Waters

Clear Media Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clear Media Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Clear Media is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Waters

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Clear Media and Waters

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

The idea behind Clear Media Limited and Waters 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.