Correlation Between DC Media and APS Holdings
Can any of the company-specific risk be diversified away by investing in both DC Media and APS Holdings 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 APS Holdings 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 APS Holdings, you can compare the effects of market volatilities on DC Media and APS Holdings 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 APS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC Media and APS Holdings.
Diversification Opportunities for DC Media and APS Holdings
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between 263720 and APS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding DC Media Co and APS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Holdings 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 APS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APS Holdings has no effect on the direction of DC Media i.e., DC Media and APS Holdings go up and down completely randomly.
Pair Corralation between DC Media and APS Holdings
Assuming the 90 days trading horizon DC Media Co is expected to generate 1.16 times more return on investment than APS Holdings. However, DC Media is 1.16 times more volatile than APS Holdings. It trades about 0.01 of its potential returns per unit of risk. APS Holdings is currently generating about -0.04 per unit of risk. If you would invest 2,370,000 in DC Media Co on September 12, 2024 and sell it today you would lose (536,000) from holding DC Media Co or give up 22.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DC Media Co vs. APS Holdings
Performance |
| Timeline |
| DC Media |
| APS Holdings |
DC Media and APS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC Media and APS Holdings
The main advantage of trading using opposite DC Media and APS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC Media position performs unexpectedly, APS Holdings 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 APS Holdings will offset losses from the drop in APS Holdings' long position.| DC Media vs. Samsung Special Purpose | DC Media vs. Solution Advanced Technology | DC Media vs. Busan Industrial Co | DC Media vs. Busan Ind |
| APS Holdings vs. Coloray International Investment | APS Holdings vs. Lotte Fine Chemical | APS Holdings vs. E Investment Development | APS Holdings vs. Hannong Chemicals |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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