Correlation Between Glory Star and Digital Media
Can any of the company-specific risk be diversified away by investing in both Glory Star and Digital 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 Glory Star and Digital Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glory Star New and Digital Media Solutions, you can compare the effects of market volatilities on Glory Star and Digital 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 Glory Star with a short position of Digital Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glory Star and Digital Media.
Diversification Opportunities for Glory Star and Digital Media
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Glory and Digital is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Glory Star New and Digital Media Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Media Solutions and Glory Star 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 Glory Star New are associated (or correlated) with Digital Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Media Solutions has no effect on the direction of Glory Star i.e., Glory Star and Digital Media go up and down completely randomly.
Pair Corralation between Glory Star and Digital Media
Given the investment horizon of 90 days Glory Star New is expected to generate 0.79 times more return on investment than Digital Media. However, Glory Star New is 1.27 times less risky than Digital Media. It trades about -0.11 of its potential returns per unit of risk. Digital Media Solutions is currently generating about -0.1 per unit of risk. If you would invest 147.00 in Glory Star New on September 19, 2024 and sell it today you would lose (97.00) from holding Glory Star New or give up 65.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glory Star New vs. Digital Media Solutions
Performance |
| Timeline |
| Glory Star New |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Digital Media Solutions |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Glory Star and Digital Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glory Star and Digital Media
The main advantage of trading using opposite Glory Star and Digital Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glory Star position performs unexpectedly, Digital 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 Digital Media will offset losses from the drop in Digital Media's long position.| Glory Star vs. Global Payout | Glory Star vs. Clubhouse Media Group | Glory Star vs. ZW Data Action | Glory Star vs. MGO Global Common |
| Digital Media vs. Advantage Solutions | Digital Media vs. Townsquare Media | Digital Media vs. Entravision Communications | Digital Media vs. Emerald Expositions Events |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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