Correlation Between Namuga and DC Media
Can any of the company-specific risk be diversified away by investing in both Namuga and DC Media 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 Namuga and DC Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namuga Co and DC Media CoLtd, you can compare the effects of market volatilities on Namuga and DC Media 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 Namuga with a short position of DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namuga and DC Media.
Diversification Opportunities for Namuga and DC Media
Very weak diversification
The 3 months correlation between Namuga and 263720 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Namuga Co and DC Media CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC Media CoLtd and Namuga 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 Namuga Co are associated (or correlated) with DC Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC Media CoLtd has no effect on the direction of Namuga i.e., Namuga and DC Media go up and down completely randomly.
Pair Corralation between Namuga and DC Media
Assuming the 90 days trading horizon Namuga Co is expected to generate 0.82 times more return on investment than DC Media. However, Namuga Co is 1.22 times less risky than DC Media. It trades about -0.01 of its potential returns per unit of risk. DC Media CoLtd is currently generating about -0.07 per unit of risk. If you would invest 1,366,000 in Namuga Co on September 1, 2024 and sell it today you would lose (96,000) from holding Namuga Co or give up 7.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namuga Co vs. DC Media CoLtd
Performance |
| Timeline |
| Namuga |
| DC Media CoLtd |
Namuga and DC Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namuga and DC Media
The main advantage of trading using opposite Namuga and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namuga position performs unexpectedly, DC Media 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 DC Media will offset losses from the drop in DC Media's long position.| Namuga vs. Dongsin Engineering Construction | Namuga vs. Doosan Fuel Cell | Namuga vs. Daishin Balance 1 | Namuga vs. Total Soft Bank |
| DC Media vs. Korea Electronic Certification | DC Media vs. DAEDUCK ELECTRONICS CoLtd | DC Media vs. Sangshin Electronics Co | DC Media vs. SCI Information Service |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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