Correlation Between DC Media and Korea Refract
Can any of the company-specific risk be diversified away by investing in both DC Media and Korea Refract 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 Korea Refract 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 Korea Refract, you can compare the effects of market volatilities on DC Media and Korea Refract 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 Korea Refract. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC Media and Korea Refract.
Diversification Opportunities for DC Media and Korea Refract
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 263720 and Korea is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding DC Media Co and Korea Refract in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refract 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 Korea Refract. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refract has no effect on the direction of DC Media i.e., DC Media and Korea Refract go up and down completely randomly.
Pair Corralation between DC Media and Korea Refract
Assuming the 90 days trading horizon DC Media Co is expected to generate 1.78 times more return on investment than Korea Refract. However, DC Media is 1.78 times more volatile than Korea Refract. It trades about 0.13 of its potential returns per unit of risk. Korea Refract is currently generating about -0.14 per unit of risk. If you would invest 1,810,000 in DC Media Co on August 29, 2024 and sell it today you would earn a total of 240,000 from holding DC Media Co or generate 13.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
DC Media Co vs. Korea Refract
Performance |
| Timeline |
| DC Media |
| Korea Refract |
DC Media and Korea Refract Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC Media and Korea Refract
The main advantage of trading using opposite DC Media and Korea Refract positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC Media position performs unexpectedly, Korea Refract 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 Korea Refract will offset losses from the drop in Korea Refract's long position.| DC Media vs. Samsung Special Purpose | DC Media vs. Busan Industrial Co | DC Media vs. Busan Ind | DC Media vs. Shinhan WTI Futures |
| Korea Refract vs. ECSTELECOM Co | Korea Refract vs. KakaoBank Corp | Korea Refract vs. BNK Financial Group | Korea Refract vs. Sewoon Medical Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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