Correlation Between Nasmedia and Playgram
Can any of the company-specific risk be diversified away by investing in both Nasmedia and Playgram 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 Nasmedia and Playgram into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasmedia Co and Playgram Co, you can compare the effects of market volatilities on Nasmedia and Playgram 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 Nasmedia with a short position of Playgram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasmedia and Playgram.
Diversification Opportunities for Nasmedia and Playgram
Very weak diversification
The 3 months correlation between Nasmedia and Playgram is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nasmedia Co and Playgram Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playgram and Nasmedia 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 Nasmedia Co are associated (or correlated) with Playgram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playgram has no effect on the direction of Nasmedia i.e., Nasmedia and Playgram go up and down completely randomly.
Pair Corralation between Nasmedia and Playgram
Assuming the 90 days trading horizon Nasmedia Co is expected to under-perform the Playgram. But the stock apears to be less risky and, when comparing its historical volatility, Nasmedia Co is 3.07 times less risky than Playgram. The stock trades about -0.16 of its potential returns per unit of risk. The Playgram Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 36,400 in Playgram Co on August 29, 2024 and sell it today you would earn a total of 3,300 from holding Playgram Co or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasmedia Co vs. Playgram Co
Performance |
| Timeline |
| Nasmedia |
| Playgram |
Nasmedia and Playgram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasmedia and Playgram
The main advantage of trading using opposite Nasmedia and Playgram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasmedia position performs unexpectedly, Playgram 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 Playgram will offset losses from the drop in Playgram's long position.The idea behind Nasmedia Co and Playgram Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Playgram vs. LG Chemicals | Playgram vs. Lotte Chemical Corp | Playgram vs. Hyundai Steel | Playgram vs. Seah Steel Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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