Correlation Between Master Drilling and EMedia Holdings
Can any of the company-specific risk be diversified away by investing in both Master Drilling and EMedia 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 Master Drilling and EMedia Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Master Drilling Group and eMedia Holdings Limited, you can compare the effects of market volatilities on Master Drilling and EMedia 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 Master Drilling with a short position of EMedia Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Master Drilling and EMedia Holdings.
Diversification Opportunities for Master Drilling and EMedia Holdings
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Master and EMedia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Master Drilling Group and eMedia Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eMedia Holdings and Master Drilling 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 Master Drilling Group are associated (or correlated) with EMedia Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eMedia Holdings has no effect on the direction of Master Drilling i.e., Master Drilling and EMedia Holdings go up and down completely randomly.
Pair Corralation between Master Drilling and EMedia Holdings
Assuming the 90 days trading horizon Master Drilling Group is expected to generate 0.85 times more return on investment than EMedia Holdings. However, Master Drilling Group is 1.18 times less risky than EMedia Holdings. It trades about 0.01 of its potential returns per unit of risk. eMedia Holdings Limited is currently generating about 0.01 per unit of risk. If you would invest 135,800 in Master Drilling Group on August 31, 2024 and sell it today you would earn a total of 1,200 from holding Master Drilling Group or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Master Drilling Group vs. eMedia Holdings Limited
Performance |
| Timeline |
| Master Drilling Group |
| eMedia Holdings |
Master Drilling and EMedia Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Master Drilling and EMedia Holdings
The main advantage of trading using opposite Master Drilling and EMedia Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Master Drilling position performs unexpectedly, EMedia 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 EMedia Holdings will offset losses from the drop in EMedia Holdings' long position.| Master Drilling vs. Kumba Iron Ore | Master Drilling vs. Astral Foods | Master Drilling vs. Frontier Transport Holdings | Master Drilling vs. CA Sales Holdings |
| EMedia Holdings vs. CA Sales Holdings | EMedia Holdings vs. Astral Foods | EMedia Holdings vs. Astoria Investments | EMedia Holdings vs. ABSA Bank Limited |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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