Correlation Between Tuksu Engineering and Digital Multimedia
Can any of the company-specific risk be diversified away by investing in both Tuksu Engineering and Digital 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 Tuksu Engineering and Digital Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tuksu Engineering ConstructionLtd and Digital Multimedia Technology, you can compare the effects of market volatilities on Tuksu Engineering and Digital 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 Tuksu Engineering with a short position of Digital Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuksu Engineering and Digital Multimedia.
Diversification Opportunities for Tuksu Engineering and Digital Multimedia
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tuksu and Digital is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Tuksu Engineering Construction and Digital Multimedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Multimedia and Tuksu Engineering 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 Tuksu Engineering ConstructionLtd are associated (or correlated) with Digital Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Multimedia has no effect on the direction of Tuksu Engineering i.e., Tuksu Engineering and Digital Multimedia go up and down completely randomly.
Pair Corralation between Tuksu Engineering and Digital Multimedia
Assuming the 90 days trading horizon Tuksu Engineering is expected to generate 2.25 times less return on investment than Digital Multimedia. But when comparing it to its historical volatility, Tuksu Engineering ConstructionLtd is 3.43 times less risky than Digital Multimedia. It trades about 0.35 of its potential returns per unit of risk. Digital Multimedia Technology is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 152,700 in Digital Multimedia Technology on October 28, 2024 and sell it today you would earn a total of 41,600 from holding Digital Multimedia Technology or generate 27.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tuksu Engineering Construction vs. Digital Multimedia Technology
Performance |
| Timeline |
| Tuksu Engineering |
| Digital Multimedia |
Tuksu Engineering and Digital Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tuksu Engineering and Digital Multimedia
The main advantage of trading using opposite Tuksu Engineering and Digital Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tuksu Engineering position performs unexpectedly, Digital 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 Digital Multimedia will offset losses from the drop in Digital Multimedia's long position.| Tuksu Engineering vs. Automobile Pc | Tuksu Engineering vs. Finebesteel | Tuksu Engineering vs. Korea Electronic Certification | Tuksu Engineering vs. Daeduck Electronics Co |
| Digital Multimedia vs. CG Hi Tech | Digital Multimedia vs. Iljin Display | Digital Multimedia vs. Miwon Chemicals Co | Digital Multimedia vs. SK Chemicals Co |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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