Correlation Between Digital Multimedia and Dong Il
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia and Dong Il 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 Digital Multimedia and Dong Il into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Multimedia Technology and Dong Il Steel, you can compare the effects of market volatilities on Digital Multimedia and Dong Il 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 Digital Multimedia with a short position of Dong Il. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and Dong Il.
Diversification Opportunities for Digital Multimedia and Dong Il
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digital and Dong is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and Dong Il Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong Il Steel and Digital Multimedia 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 Digital Multimedia Technology are associated (or correlated) with Dong Il. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong Il Steel has no effect on the direction of Digital Multimedia i.e., Digital Multimedia and Dong Il go up and down completely randomly.
Pair Corralation between Digital Multimedia and Dong Il
Assuming the 90 days trading horizon Digital Multimedia Technology is expected to under-perform the Dong Il. In addition to that, Digital Multimedia is 1.83 times more volatile than Dong Il Steel. It trades about -0.05 of its total potential returns per unit of risk. Dong Il Steel is currently generating about -0.06 per unit of volatility. If you would invest 229,000 in Dong Il Steel on November 19, 2024 and sell it today you would lose (105,100) from holding Dong Il Steel or give up 45.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.18% |
| Values | Daily Returns |
Digital Multimedia Technology vs. Dong Il Steel
Performance |
| Timeline |
| Digital Multimedia |
| Dong Il Steel |
Digital Multimedia and Dong Il Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and Dong Il
The main advantage of trading using opposite Digital Multimedia and Dong Il positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia position performs unexpectedly, Dong Il 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 Dong Il will offset losses from the drop in Dong Il's long position.| Digital Multimedia vs. Ssangyong Materials Corp | Digital Multimedia vs. Next Entertainment World | Digital Multimedia vs. Barunson Entertainment Arts | Digital Multimedia vs. Daewon Media Co |
| Dong Il vs. Hannong Chemicals | Dong Il vs. Miwon Chemical | Dong Il vs. E Investment Development | Dong Il vs. SV Investment |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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