Correlation Between Digital Multimedia and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia and Kukdong Oil 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 Kukdong Oil 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 Kukdong Oil Chemicals, you can compare the effects of market volatilities on Digital Multimedia and Kukdong Oil 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 Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and Kukdong Oil.
Diversification Opportunities for Digital Multimedia and Kukdong Oil
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Digital and Kukdong is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals 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 Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of Digital Multimedia i.e., Digital Multimedia and Kukdong Oil go up and down completely randomly.
Pair Corralation between Digital Multimedia and Kukdong Oil
Assuming the 90 days trading horizon Digital Multimedia Technology is expected to under-perform the Kukdong Oil. In addition to that, Digital Multimedia is 1.23 times more volatile than Kukdong Oil Chemicals. It trades about -0.05 of its total potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about 0.01 per unit of volatility. If you would invest 368,964 in Kukdong Oil Chemicals on August 25, 2024 and sell it today you would lose (5,964) from holding Kukdong Oil Chemicals or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Digital Multimedia Technology vs. Kukdong Oil Chemicals
Performance |
| Timeline |
| Digital Multimedia |
| Kukdong Oil Chemicals |
Digital Multimedia and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and Kukdong Oil
The main advantage of trading using opposite Digital Multimedia and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| Digital Multimedia vs. AptaBio Therapeutics | Digital Multimedia vs. Daewoo SBI SPAC | Digital Multimedia vs. Dream Security co | Digital Multimedia vs. Microfriend |
| Kukdong Oil vs. Hana Materials | Kukdong Oil vs. Hanjin Transportation Co | Kukdong Oil vs. Hanmi Semiconductor Co | Kukdong Oil vs. LAKE MATERIALS LTD |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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