Correlation Between Koh Young and DC Media
Can any of the company-specific risk be diversified away by investing in both Koh Young 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 Koh Young and DC Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koh Young Technology and DC Media CoLtd, you can compare the effects of market volatilities on Koh Young 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 Koh Young with a short position of DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koh Young and DC Media.
Diversification Opportunities for Koh Young and DC Media
Good diversification
The 3 months correlation between Koh and 263720 is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Koh Young 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 Koh Young 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 Koh Young 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 Koh Young i.e., Koh Young and DC Media go up and down completely randomly.
Pair Corralation between Koh Young and DC Media
Assuming the 90 days trading horizon Koh Young Technology is expected to under-perform the DC Media. But the stock apears to be less risky and, when comparing its historical volatility, Koh Young Technology is 1.37 times less risky than DC Media. The stock trades about -0.55 of its potential returns per unit of risk. The DC Media CoLtd is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,790,000 in DC Media CoLtd on September 4, 2024 and sell it today you would earn a total of 151,000 from holding DC Media CoLtd or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koh Young Technology vs. DC Media CoLtd
Performance |
| Timeline |
| Koh Young Technology |
| DC Media CoLtd |
Koh Young and DC Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koh Young and DC Media
The main advantage of trading using opposite Koh Young and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koh Young 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.The idea behind Koh Young Technology and DC Media CoLtd 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.| DC Media vs. Daedong Metals Co | DC Media vs. Shinhan Inverse Silver | DC Media vs. Duksan Hi Metal | DC Media vs. Pureun Mutual Savings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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