Correlation Between Value Added and DC Media
Can any of the company-specific risk be diversified away by investing in both Value Added 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 Value Added and DC Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Added Technology and DC Media CoLtd, you can compare the effects of market volatilities on Value Added 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 Value Added with a short position of DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Added and DC Media.
Diversification Opportunities for Value Added and DC Media
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Value and 263720 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Value Added Technology 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 Value Added 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 Value Added Technology 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 Value Added i.e., Value Added and DC Media go up and down completely randomly.
Pair Corralation between Value Added and DC Media
Assuming the 90 days trading horizon Value Added Technology is expected to under-perform the DC Media. But the stock apears to be less risky and, when comparing its historical volatility, Value Added Technology is 2.14 times less risky than DC Media. The stock trades about -0.07 of its potential returns per unit of risk. The DC Media CoLtd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,828,000 in DC Media CoLtd on September 12, 2024 and sell it today you would earn a total of 6,000 from holding DC Media CoLtd or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Value Added Technology vs. DC Media CoLtd
Performance |
| Timeline |
| Value Added Technology |
| DC Media CoLtd |
Value Added and DC Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Added and DC Media
The main advantage of trading using opposite Value Added and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Added 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.| Value Added vs. DIO Corporation | Value Added vs. Medy Tox | Value Added vs. InBody CoLtd | Value Added vs. Soulbrain Holdings Co |
| DC Media vs. Samsung Special Purpose | DC Media vs. Solution Advanced Technology | DC Media vs. Busan Industrial Co | DC Media vs. Busan Ind |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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