Correlation Between Cistera Networks and Ua Multimedia

Can any of the company-specific risk be diversified away by investing in both Cistera Networks and Ua Multimedia 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 Cistera Networks and Ua Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cistera Networks and Ua Multimedia, you can compare the effects of market volatilities on Cistera Networks and Ua Multimedia 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 Cistera Networks with a short position of Ua Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cistera Networks and Ua Multimedia.

Diversification Opportunities for Cistera Networks and Ua Multimedia

0.0

Correlation Coefficient

Cistera Networks  Ua Multimedia

Pay attention - limited upside

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

Pair Corralation between Cistera Networks and Ua Multimedia

Given the investment horizon of 90 days Cistera Networks is expected to generate 3.53 times less return on investment than Ua Multimedia. But when comparing it to its historical volatility, Cistera Networks is 1.88 times less risky than Ua Multimedia. It trades about 0.03 of its potential returns per unit of risk. Ua Multimedia is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.21  in Ua Multimedia on September 15, 2024 and sell it today you would lose (0.04) from holding Ua Multimedia or give up 19.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	83.87%
Values	Daily Returns

Cistera Networks  vs.  Ua Multimedia

Cistera Networks

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ua Multimedia

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ua Multimedia are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting primary indicators, Ua Multimedia displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cistera Networks and Ua Multimedia

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

The idea behind Cistera Networks and Ua Multimedia 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.