Correlation Between MEDIPOST and Digital Power
Can any of the company-specific risk be diversified away by investing in both MEDIPOST and Digital Power 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 MEDIPOST and Digital Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDIPOST Co and Digital Power Communications, you can compare the effects of market volatilities on MEDIPOST and Digital Power 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 MEDIPOST with a short position of Digital Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIPOST and Digital Power.
Diversification Opportunities for MEDIPOST and Digital Power
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MEDIPOST and Digital is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding MEDIPOST Co and Digital Power Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Power Commun and MEDIPOST 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 MEDIPOST Co are associated (or correlated) with Digital Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Power Commun has no effect on the direction of MEDIPOST i.e., MEDIPOST and Digital Power go up and down completely randomly.
Pair Corralation between MEDIPOST and Digital Power
Assuming the 90 days trading horizon MEDIPOST Co is expected to generate 4.8 times more return on investment than Digital Power. However, MEDIPOST is 4.8 times more volatile than Digital Power Communications. It trades about 0.23 of its potential returns per unit of risk. Digital Power Communications is currently generating about 0.2 per unit of risk. If you would invest 871,000 in MEDIPOST Co on October 10, 2024 and sell it today you would earn a total of 337,000 from holding MEDIPOST Co or generate 38.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDIPOST Co vs. Digital Power Communications
Performance |
| Timeline |
| MEDIPOST |
| Digital Power Commun |
MEDIPOST and Digital Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDIPOST and Digital Power
The main advantage of trading using opposite MEDIPOST and Digital Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDIPOST position performs unexpectedly, Digital Power 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 Power will offset losses from the drop in Digital Power's long position.| MEDIPOST vs. Hana Materials | MEDIPOST vs. Tamul Multimedia Co | MEDIPOST vs. DC Media Co | MEDIPOST vs. Next Entertainment World |
| Digital Power vs. Cube Entertainment | Digital Power vs. TJ media Co | Digital Power vs. JYP Entertainment Corp | Digital Power vs. Next Entertainment World |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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