Correlation Between DC Media and Ni Steel
Can any of the company-specific risk be diversified away by investing in both DC Media and Ni Steel 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 DC Media and Ni Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DC Media Co and Ni Steel, you can compare the effects of market volatilities on DC Media and Ni Steel 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 DC Media with a short position of Ni Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC Media and Ni Steel.
Diversification Opportunities for DC Media and Ni Steel
Average diversification
The 3 months correlation between 263720 and 008260 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding DC Media Co and Ni Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ni Steel and DC Media 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 DC Media Co are associated (or correlated) with Ni Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ni Steel has no effect on the direction of DC Media i.e., DC Media and Ni Steel go up and down completely randomly.
Pair Corralation between DC Media and Ni Steel
Assuming the 90 days trading horizon DC Media Co is expected to generate 2.62 times more return on investment than Ni Steel. However, DC Media is 2.62 times more volatile than Ni Steel. It trades about 0.02 of its potential returns per unit of risk. Ni Steel is currently generating about -0.06 per unit of risk. If you would invest 1,810,000 in DC Media Co on August 25, 2024 and sell it today you would earn a total of 45,000 from holding DC Media Co or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DC Media Co vs. Ni Steel
Performance |
| Timeline |
| DC Media |
| Ni Steel |
DC Media and Ni Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC Media and Ni Steel
The main advantage of trading using opposite DC Media and Ni Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC Media position performs unexpectedly, Ni Steel 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 Ni Steel will offset losses from the drop in Ni Steel's long position.| DC Media vs. DB Financial Investment | DC Media vs. Korea Information Engineering | DC Media vs. Samyang Foods Co | DC Media vs. System and Application |
| Ni Steel vs. Youngchang Chemical Co | Ni Steel vs. Chin Yang Chemical | Ni Steel vs. MediaZen | Ni Steel vs. Korea Petro Chemical |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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