Correlation Between Digital Multimedia and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia and BIT Computer 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 BIT Computer 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 BIT Computer Co, you can compare the effects of market volatilities on Digital Multimedia and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and BIT Computer.
Diversification Opportunities for Digital Multimedia and BIT Computer
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Digital and BIT is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Digital Multimedia i.e., Digital Multimedia and BIT Computer go up and down completely randomly.
Pair Corralation between Digital Multimedia and BIT Computer
Assuming the 90 days trading horizon Digital Multimedia Technology is expected to generate 2.01 times more return on investment than BIT Computer. However, Digital Multimedia is 2.01 times more volatile than BIT Computer Co. It trades about 0.1 of its potential returns per unit of risk. BIT Computer Co is currently generating about 0.0 per unit of risk. If you would invest 169,600 in Digital Multimedia Technology on October 30, 2024 and sell it today you would earn a total of 24,700 from holding Digital Multimedia Technology or generate 14.56% 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. BIT Computer Co
Performance |
| Timeline |
| Digital Multimedia |
| BIT Computer |
Digital Multimedia and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and BIT Computer
The main advantage of trading using opposite Digital Multimedia and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Digital Multimedia vs. Dongbu Insurance Co | Digital Multimedia vs. Hanjin Transportation Co | Digital Multimedia vs. Samyang Foods Co | Digital Multimedia vs. Youl Chon Chemical |
| BIT Computer vs. Alton Sports CoLtd | BIT Computer vs. Korea Shipbuilding Offshore | BIT Computer vs. Green Cross Medical | BIT Computer vs. MetaLabs 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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