Correlation Between Digital Multimedia and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia and Jeong Moon 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 Jeong Moon 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 Jeong Moon Information, you can compare the effects of market volatilities on Digital Multimedia and Jeong Moon 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 Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and Jeong Moon.
Diversification Opportunities for Digital Multimedia and Jeong Moon
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Digital and Jeong is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon 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 Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of Digital Multimedia i.e., Digital Multimedia and Jeong Moon go up and down completely randomly.
Pair Corralation between Digital Multimedia and Jeong Moon
Assuming the 90 days trading horizon Digital Multimedia Technology is expected to generate 1.72 times more return on investment than Jeong Moon. However, Digital Multimedia is 1.72 times more volatile than Jeong Moon Information. It trades about 0.1 of its potential returns per unit of risk. Jeong Moon Information is currently generating about -0.04 per unit of risk. If you would invest 169,400 in Digital Multimedia Technology on November 1, 2024 and sell it today you would earn a total of 24,900 from holding Digital Multimedia Technology or generate 14.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Multimedia Technology vs. Jeong Moon Information
Performance |
| Timeline |
| Digital Multimedia |
| Jeong Moon Information |
Digital Multimedia and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and Jeong Moon
The main advantage of trading using opposite Digital Multimedia and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.| Digital Multimedia vs. UJU Electronics Co | Digital Multimedia vs. ABCO Electronics Co | Digital Multimedia vs. Korea Electronic Certification | Digital Multimedia vs. Samyoung Electronics Co |
| Jeong Moon vs. Sangsangin Investment Securities | Jeong Moon vs. Samyoung Electronics Co | Jeong Moon vs. Samji Electronics Co | Jeong Moon vs. Golden Bridge 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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