Correlation Between Digital Multimedia and Kukdo Chemical
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia and Kukdo Chemical 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 Kukdo Chemical 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 Kukdo Chemical Co, you can compare the effects of market volatilities on Digital Multimedia and Kukdo Chemical 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 Kukdo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and Kukdo Chemical.
Diversification Opportunities for Digital Multimedia and Kukdo Chemical
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Digital and Kukdo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and Kukdo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdo Chemical 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 Kukdo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdo Chemical has no effect on the direction of Digital Multimedia i.e., Digital Multimedia and Kukdo Chemical go up and down completely randomly.
Pair Corralation between Digital Multimedia and Kukdo Chemical
Assuming the 90 days trading horizon Digital Multimedia Technology is expected to under-perform the Kukdo Chemical. In addition to that, Digital Multimedia is 1.66 times more volatile than Kukdo Chemical Co. It trades about -0.26 of its total potential returns per unit of risk. Kukdo Chemical Co is currently generating about -0.22 per unit of volatility. If you would invest 3,250,000 in Kukdo Chemical Co on August 31, 2024 and sell it today you would lose (250,000) from holding Kukdo Chemical Co or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Multimedia Technology vs. Kukdo Chemical Co
Performance |
| Timeline |
| Digital Multimedia |
| Kukdo Chemical |
Digital Multimedia and Kukdo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and Kukdo Chemical
The main advantage of trading using opposite Digital Multimedia and Kukdo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia position performs unexpectedly, Kukdo Chemical 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 Kukdo Chemical will offset losses from the drop in Kukdo Chemical's long position.The idea behind Digital Multimedia Technology and Kukdo Chemical 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.
| Kukdo Chemical vs. Kukdo Chemical | Kukdo Chemical vs. Korea Refract | Kukdo Chemical vs. Korea Refractories Co | Kukdo Chemical vs. Shinhan Inverse WTI |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |