Correlation Between Next Mediaworks and Cyber Media

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

By analyzing existing cross correlation between Next Mediaworks Limited and Cyber Media Research, you can compare the effects of market volatilities on Next Mediaworks and Cyber Media 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 Next Mediaworks with a short position of Cyber Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Mediaworks and Cyber Media.

Diversification Opportunities for Next Mediaworks and Cyber Media

0.07

Correlation Coefficient

Next Mediaworks  Cyber Media

Significant diversification

The 3 months correlation between Next and Cyber is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Next Mediaworks Limited and Cyber Media Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyber Media Research and Next Mediaworks 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 Next Mediaworks Limited are associated (or correlated) with Cyber Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyber Media Research has no effect on the direction of Next Mediaworks i.e., Next Mediaworks and Cyber Media go up and down completely randomly.

Pair Corralation between Next Mediaworks and Cyber Media

Assuming the 90 days trading horizon Next Mediaworks Limited is expected to under-perform the Cyber Media. But the stock apears to be less risky and, when comparing its historical volatility, Next Mediaworks Limited is 2.21 times less risky than Cyber Media. The stock trades about -0.09 of its potential returns per unit of risk. The Cyber Media Research is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  8,780  in Cyber Media Research on April 25, 2025 and sell it today you would lose (580.00) from holding Cyber Media Research or give up 6.61% of portfolio value over 90 days.

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

Next Mediaworks Limited  vs.  Cyber Media Research

Next Mediaworks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Next Mediaworks Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Cyber Media Research

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cyber Media Research has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cyber Media is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Next Mediaworks and Cyber Media

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

The idea behind Next Mediaworks Limited and Cyber Media Research 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.