Correlation Between DC Media and CU Medical
Can any of the company-specific risk be diversified away by investing in both DC Media and CU Medical 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 CU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DC Media CoLtd and CU Medical Systems, you can compare the effects of market volatilities on DC Media and CU Medical 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 CU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of DC Media and CU Medical.
Diversification Opportunities for DC Media and CU Medical
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 263720 and 115480 is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding DC Media CoLtd and CU Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Medical Systems 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 CoLtd are associated (or correlated) with CU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Medical Systems has no effect on the direction of DC Media i.e., DC Media and CU Medical go up and down completely randomly.
Pair Corralation between DC Media and CU Medical
Assuming the 90 days trading horizon DC Media CoLtd is expected to under-perform the CU Medical. In addition to that, DC Media is 4.33 times more volatile than CU Medical Systems. It trades about -0.11 of its total potential returns per unit of risk. CU Medical Systems is currently generating about 0.17 per unit of volatility. If you would invest 68,600 in CU Medical Systems on October 20, 2024 and sell it today you would earn a total of 2,300 from holding CU Medical Systems or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DC Media CoLtd vs. CU Medical Systems
Performance |
| Timeline |
| DC Media CoLtd |
| CU Medical Systems |
DC Media and CU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DC Media and CU Medical
The main advantage of trading using opposite DC Media and CU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DC Media position performs unexpectedly, CU Medical 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 CU Medical will offset losses from the drop in CU Medical's long position.| DC Media vs. CU Medical Systems | DC Media vs. SM Entertainment Co | DC Media vs. Cube Entertainment | DC Media vs. Daishin Information Communications |
| CU Medical vs. Polaris Office Corp | CU Medical vs. Hankook Furniture Co | CU Medical vs. Dongbang Transport Logistics | CU Medical vs. Genie Music |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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