Correlation Between Discover Financial and One Media
Can any of the company-specific risk be diversified away by investing in both Discover Financial and One 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 Discover Financial and One Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and One Media iP, you can compare the effects of market volatilities on Discover Financial and One 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 Discover Financial with a short position of One Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and One Media.
Diversification Opportunities for Discover Financial and One Media
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Discover and One is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP and Discover Financial 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 Discover Financial Services are associated (or correlated) with One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of Discover Financial i.e., Discover Financial and One Media go up and down completely randomly.
Pair Corralation between Discover Financial and One Media
Assuming the 90 days trading horizon Discover Financial Services is expected to generate 1.05 times more return on investment than One Media. However, Discover Financial is 1.05 times more volatile than One Media iP. It trades about 0.15 of its potential returns per unit of risk. One Media iP is currently generating about 0.06 per unit of risk. If you would invest 14,660 in Discover Financial Services on September 13, 2024 and sell it today you would earn a total of 2,981 from holding Discover Financial Services or generate 20.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Discover Financial Services vs. One Media iP
Performance |
| Timeline |
| Discover Financial |
| One Media iP |
Discover Financial and One Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and One Media
The main advantage of trading using opposite Discover Financial and One Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, One 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 One Media will offset losses from the drop in One Media's long position.| Discover Financial vs. Federal Realty Investment | Discover Financial vs. Jacquet Metal Service | Discover Financial vs. Silvercorp Metals | Discover Financial vs. Kinnevik Investment AB |
| One Media vs. OneSavings Bank PLC | One Media vs. Alior Bank SA | One Media vs. Discover Financial Services | One Media vs. St Galler Kantonalbank |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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