Correlation Between DC Media and Daiyang Metal
Can any of the company-specific risk be diversified away by investing in both DC Media and Daiyang Metal 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 Daiyang Metal 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 Daiyang Metal Co, you can compare the effects of market volatilities on DC Media and Daiyang Metal 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 Daiyang Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC Media and Daiyang Metal.
Diversification Opportunities for DC Media and Daiyang Metal
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between 263720 and Daiyang is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding DC Media Co and Daiyang Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiyang Metal 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 Daiyang Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiyang Metal has no effect on the direction of DC Media i.e., DC Media and Daiyang Metal go up and down completely randomly.
Pair Corralation between DC Media and Daiyang Metal
Assuming the 90 days trading horizon DC Media Co is expected to under-perform the Daiyang Metal. In addition to that, DC Media is 1.67 times more volatile than Daiyang Metal Co. It trades about -0.23 of its total potential returns per unit of risk. Daiyang Metal Co is currently generating about -0.1 per unit of volatility. If you would invest 153,300 in Daiyang Metal Co on November 3, 2024 and sell it today you would lose (7,400) from holding Daiyang Metal Co or give up 4.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DC Media Co vs. Daiyang Metal Co
Performance |
| Timeline |
| DC Media |
| Daiyang Metal |
DC Media and Daiyang Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC Media and Daiyang Metal
The main advantage of trading using opposite DC Media and Daiyang Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC Media position performs unexpectedly, Daiyang Metal 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 Daiyang Metal will offset losses from the drop in Daiyang Metal's long position.| DC Media vs. Sangsangin Investment Securities | DC Media vs. SBI Investment KOREA | DC Media vs. Stic Investments | DC Media vs. Korea Investment Holdings |
| Daiyang Metal vs. Nice Information Telecommunication | Daiyang Metal vs. Hannong Chemicals | Daiyang Metal vs. Daishin Information Communications | Daiyang Metal vs. Lotte Data Communication |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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