Correlation Between DC Media and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both DC Media and Kaonmedia 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 Kaonmedia 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 Kaonmedia Co, you can compare the effects of market volatilities on DC Media and Kaonmedia 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 Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC Media and Kaonmedia.
Diversification Opportunities for DC Media and Kaonmedia
Very weak diversification
The 3 months correlation between 263720 and Kaonmedia is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding DC Media Co and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia 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 Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of DC Media i.e., DC Media and Kaonmedia go up and down completely randomly.
Pair Corralation between DC Media and Kaonmedia
Assuming the 90 days trading horizon DC Media Co is expected to generate 0.91 times more return on investment than Kaonmedia. However, DC Media Co is 1.1 times less risky than Kaonmedia. It trades about 0.25 of its potential returns per unit of risk. Kaonmedia Co is currently generating about -0.04 per unit of risk. If you would invest 1,732,000 in DC Media Co on August 29, 2024 and sell it today you would earn a total of 318,000 from holding DC Media Co or generate 18.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DC Media Co vs. Kaonmedia Co
Performance |
| Timeline |
| DC Media |
| Kaonmedia |
DC Media and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC Media and Kaonmedia
The main advantage of trading using opposite DC Media and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC Media position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia's long position.| DC Media vs. Busan Industrial Co | DC Media vs. Busan Ind | DC Media vs. Mirae Asset Daewoo | DC Media vs. UNISEM Co |
| Kaonmedia vs. Ssangyong Materials Corp | Kaonmedia vs. Polaris Office Corp | Kaonmedia vs. Automobile Pc | Kaonmedia vs. Korean Air Lines |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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