Correlation Between SCI Information and DC Media
Can any of the company-specific risk be diversified away by investing in both SCI Information and DC 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 SCI Information and DC Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCI Information Service and DC Media CoLtd, you can compare the effects of market volatilities on SCI Information and DC 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 SCI Information with a short position of DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and DC Media.
Diversification Opportunities for SCI Information and DC Media
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCI and 263720 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and DC Media CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC Media CoLtd and SCI Information 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 SCI Information Service are associated (or correlated) with DC Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC Media CoLtd has no effect on the direction of SCI Information i.e., SCI Information and DC Media go up and down completely randomly.
Pair Corralation between SCI Information and DC Media
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the DC Media. But the stock apears to be less risky and, when comparing its historical volatility, SCI Information Service is 1.47 times less risky than DC Media. The stock trades about -0.21 of its potential returns per unit of risk. The DC Media CoLtd is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,750,000 in DC Media CoLtd on September 2, 2024 and sell it today you would earn a total of 249,000 from holding DC Media CoLtd or generate 14.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCI Information Service vs. DC Media CoLtd
Performance |
| Timeline |
| SCI Information Service |
| DC Media CoLtd |
SCI Information and DC Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and DC Media
The main advantage of trading using opposite SCI Information and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information position performs unexpectedly, DC 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 DC Media will offset losses from the drop in DC Media's long position.| SCI Information vs. Samsung Electronics Co | SCI Information vs. Samsung Electronics Co | SCI Information vs. KB Financial Group | SCI Information vs. Shinhan Financial Group |
| DC Media vs. Kaonmedia Co | DC Media vs. Keyang Electric Machinery | DC Media vs. TJ media Co | DC Media vs. DC Media 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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