Correlation Between Formetal and DC Media
Can any of the company-specific risk be diversified away by investing in both Formetal 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 Formetal and DC Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formetal Co and DC Media CoLtd, you can compare the effects of market volatilities on Formetal 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 Formetal with a short position of DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formetal and DC Media.
Diversification Opportunities for Formetal and DC Media
Very good diversification
The 3 months correlation between Formetal and 263720 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Formetal Co 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 Formetal 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 Formetal Co 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 Formetal i.e., Formetal and DC Media go up and down completely randomly.
Pair Corralation between Formetal and DC Media
Assuming the 90 days trading horizon Formetal Co is expected to under-perform the DC Media. In addition to that, Formetal is 3.61 times more volatile than DC Media CoLtd. It trades about -0.12 of its total potential returns per unit of risk. DC Media CoLtd is currently generating about 0.11 per unit of volatility. If you would invest 1,794,000 in DC Media CoLtd on November 28, 2024 and sell it today you would earn a total of 42,000 from holding DC Media CoLtd or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Formetal Co vs. DC Media CoLtd
Performance |
| Timeline |
| Formetal |
| DC Media CoLtd |
Formetal and DC Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formetal and DC Media
The main advantage of trading using opposite Formetal and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formetal 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.| Formetal vs. Eugene Investment Securities | Formetal vs. Solus Advanced Materials | Formetal vs. Ssangyong Materials Corp | Formetal vs. PI Advanced Materials |
| DC Media vs. PJ Metal Co | DC Media vs. Sejong Industrial | DC Media vs. Sejong Telecom | DC Media vs. Songwon Industrial Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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