Correlation Between DCB MERCIAL and NATION MEDIA
Can any of the company-specific risk be diversified away by investing in both DCB MERCIAL and NATION MEDIA 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 DCB MERCIAL and NATION MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DCB MERCIAL BANK and NATION MEDIA GROUP, you can compare the effects of market volatilities on DCB MERCIAL and NATION MEDIA 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 DCB MERCIAL with a short position of NATION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DCB MERCIAL and NATION MEDIA.
Diversification Opportunities for DCB MERCIAL and NATION MEDIA
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between DCB and NATION is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding DCB MERCIAL BANK and NATION MEDIA GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATION MEDIA GROUP and DCB MERCIAL 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 DCB MERCIAL BANK are associated (or correlated) with NATION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATION MEDIA GROUP has no effect on the direction of DCB MERCIAL i.e., DCB MERCIAL and NATION MEDIA go up and down completely randomly.
Pair Corralation between DCB MERCIAL and NATION MEDIA
Assuming the 90 days trading horizon DCB MERCIAL BANK is expected to generate 0.17 times more return on investment than NATION MEDIA. However, DCB MERCIAL BANK is 5.79 times less risky than NATION MEDIA. It trades about -0.22 of its potential returns per unit of risk. NATION MEDIA GROUP is currently generating about -0.23 per unit of risk. If you would invest 16,500 in DCB MERCIAL BANK on August 31, 2024 and sell it today you would lose (500.00) from holding DCB MERCIAL BANK or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DCB MERCIAL BANK vs. NATION MEDIA GROUP
Performance |
| Timeline |
| DCB MERCIAL BANK |
| NATION MEDIA GROUP |
DCB MERCIAL and NATION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DCB MERCIAL and NATION MEDIA
The main advantage of trading using opposite DCB MERCIAL and NATION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DCB MERCIAL position performs unexpectedly, NATION MEDIA 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 NATION MEDIA will offset losses from the drop in NATION MEDIA's long position.| DCB MERCIAL vs. YETU MICROFINANCE PLC | DCB MERCIAL vs. CRDB BANK LTD | DCB MERCIAL vs. MWALIMU MERCIAL BANK | DCB MERCIAL vs. AFRIPRISE INVESTMENT PLC |
| NATION MEDIA vs. YETU MICROFINANCE PLC | NATION MEDIA vs. CRDB BANK LTD | NATION MEDIA vs. MWALIMU MERCIAL BANK | NATION MEDIA vs. AFRIPRISE INVESTMENT PLC |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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