Correlation Between Digital Power and Daewon Media
Can any of the company-specific risk be diversified away by investing in both Digital Power and Daewon 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 Digital Power and Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Power Communications and Daewon Media Co, you can compare the effects of market volatilities on Digital Power and Daewon 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 Digital Power with a short position of Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Power and Daewon Media.
Diversification Opportunities for Digital Power and Daewon Media
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Digital and Daewon is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Digital Power Communications and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media and Digital Power 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 Digital Power Communications are associated (or correlated) with Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Digital Power i.e., Digital Power and Daewon Media go up and down completely randomly.
Pair Corralation between Digital Power and Daewon Media
Assuming the 90 days trading horizon Digital Power Communications is expected to under-perform the Daewon Media. But the stock apears to be less risky and, when comparing its historical volatility, Digital Power Communications is 2.93 times less risky than Daewon Media. The stock trades about -0.3 of its potential returns per unit of risk. The Daewon Media Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 771,831 in Daewon Media Co on October 25, 2024 and sell it today you would earn a total of 58,169 from holding Daewon Media Co or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Power Communications vs. Daewon Media Co
Performance |
| Timeline |
| Digital Power Commun |
| Daewon Media |
Digital Power and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Power and Daewon Media
The main advantage of trading using opposite Digital Power and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Power position performs unexpectedly, Daewon 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 Daewon Media will offset losses from the drop in Daewon Media's long position.| Digital Power vs. KB Financial Group | Digital Power vs. Shinhan Financial Group | Digital Power vs. Hana Financial | Digital Power vs. Woori Financial Group |
| Daewon Media vs. Daishin Information Communications | Daewon Media vs. Automobile Pc | Daewon Media vs. Digital Power Communications | Daewon Media vs. Mobile Appliance |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |