Correlation Between Digital Multimedia and Cenit
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia and Cenit 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 Cenit 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 Cenit Co, you can compare the effects of market volatilities on Digital Multimedia and Cenit 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 Cenit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and Cenit.
Diversification Opportunities for Digital Multimedia and Cenit
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Digital and Cenit is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and Cenit Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenit 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 Cenit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenit has no effect on the direction of Digital Multimedia i.e., Digital Multimedia and Cenit go up and down completely randomly.
Pair Corralation between Digital Multimedia and Cenit
Assuming the 90 days trading horizon Digital Multimedia Technology is expected to under-perform the Cenit. In addition to that, Digital Multimedia is 2.11 times more volatile than Cenit Co. It trades about -0.18 of its total potential returns per unit of risk. Cenit Co is currently generating about -0.22 per unit of volatility. If you would invest 157,400 in Cenit Co on August 30, 2024 and sell it today you would lose (11,300) from holding Cenit Co or give up 7.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Digital Multimedia Technology vs. Cenit Co
Performance |
| Timeline |
| Digital Multimedia |
| Cenit |
Digital Multimedia and Cenit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and Cenit
The main advantage of trading using opposite Digital Multimedia and Cenit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia position performs unexpectedly, Cenit 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 Cenit will offset losses from the drop in Cenit's long position.| Digital Multimedia vs. AptaBio Therapeutics | Digital Multimedia vs. Daewoo SBI SPAC | Digital Multimedia vs. Dream Security co | Digital Multimedia vs. Microfriend |
| Cenit vs. Jeju Air Co | Cenit vs. Hanjin Transportation Co | Cenit vs. Taegu Broadcasting | Cenit vs. Korea Air Svc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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