Correlation Between Digital Multimedia and Korea Information
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia and Korea Information 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 Korea Information 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 Korea Information Communications, you can compare the effects of market volatilities on Digital Multimedia and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and Korea Information.
Diversification Opportunities for Digital Multimedia and Korea Information
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Digital and Korea is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Digital Multimedia i.e., Digital Multimedia and Korea Information go up and down completely randomly.
Pair Corralation between Digital Multimedia and Korea Information
Assuming the 90 days trading horizon Digital Multimedia Technology is expected to generate 3.56 times more return on investment than Korea Information. However, Digital Multimedia is 3.56 times more volatile than Korea Information Communications. It trades about 0.1 of its potential returns per unit of risk. Korea Information Communications is currently generating about -0.05 per unit of risk. If you would invest 166,600 in Digital Multimedia Technology on October 28, 2024 and sell it today you would earn a total of 27,700 from holding Digital Multimedia Technology or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Multimedia Technology vs. Korea Information Communicatio
Performance |
| Timeline |
| Digital Multimedia |
| Korea Information |
Digital Multimedia and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and Korea Information
The main advantage of trading using opposite Digital Multimedia and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Digital Multimedia vs. CG Hi Tech | Digital Multimedia vs. Iljin Display | Digital Multimedia vs. Miwon Chemicals Co | Digital Multimedia vs. SK Chemicals Co |
| Korea Information vs. TS Investment Corp | Korea Information vs. Tae Kyung Chemical | Korea Information vs. Kyung In Synthetic Corp | Korea Information vs. KTB Investment Securities |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |