Correlation Between Digital Multimedia and Foodnamoo
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia and Foodnamoo 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 Foodnamoo 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 Foodnamoo, you can compare the effects of market volatilities on Digital Multimedia and Foodnamoo 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 Foodnamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and Foodnamoo.
Diversification Opportunities for Digital Multimedia and Foodnamoo
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Digital and Foodnamoo is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and Foodnamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodnamoo 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 Foodnamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodnamoo has no effect on the direction of Digital Multimedia i.e., Digital Multimedia and Foodnamoo go up and down completely randomly.
Pair Corralation between Digital Multimedia and Foodnamoo
Assuming the 90 days trading horizon Digital Multimedia Technology is expected to under-perform the Foodnamoo. But the stock apears to be less risky and, when comparing its historical volatility, Digital Multimedia Technology is 1.14 times less risky than Foodnamoo. The stock trades about -0.26 of its potential returns per unit of risk. The Foodnamoo is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 333,000 in Foodnamoo on August 31, 2024 and sell it today you would lose (29,000) from holding Foodnamoo or give up 8.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Multimedia Technology vs. Foodnamoo
Performance |
| Timeline |
| Digital Multimedia |
| Foodnamoo |
Digital Multimedia and Foodnamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and Foodnamoo
The main advantage of trading using opposite Digital Multimedia and Foodnamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia position performs unexpectedly, Foodnamoo 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 Foodnamoo will offset losses from the drop in Foodnamoo's long position.The idea behind Digital Multimedia Technology and Foodnamoo pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Foodnamoo vs. Cherrybro coLtd | Foodnamoo vs. Busan Industrial Co | Foodnamoo vs. Busan Ind | Foodnamoo vs. Mirae Asset Daewoo |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |