Correlation Between Oriental Culture and D MARKET
Can any of the company-specific risk be diversified away by investing in both Oriental Culture and D MARKET 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 Oriental Culture and D MARKET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Culture Holding and D MARKET Electronic Services, you can compare the effects of market volatilities on Oriental Culture and D MARKET 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 Oriental Culture with a short position of D MARKET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Culture and D MARKET.
Diversification Opportunities for Oriental Culture and D MARKET
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oriental and HEPS is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Culture Holding and D MARKET Electronic Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D MARKET Electronic and Oriental Culture 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 Oriental Culture Holding are associated (or correlated) with D MARKET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D MARKET Electronic has no effect on the direction of Oriental Culture i.e., Oriental Culture and D MARKET go up and down completely randomly.
Pair Corralation between Oriental Culture and D MARKET
Considering the 90-day investment horizon Oriental Culture Holding is expected to under-perform the D MARKET. In addition to that, Oriental Culture is 1.36 times more volatile than D MARKET Electronic Services. It trades about 0.0 of its total potential returns per unit of risk. D MARKET Electronic Services is currently generating about 0.08 per unit of volatility. If you would invest 105.00 in D MARKET Electronic Services on August 27, 2024 and sell it today you would earn a total of 176.00 from holding D MARKET Electronic Services or generate 167.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Culture Holding vs. D MARKET Electronic Services
Performance |
| Timeline |
| Oriental Culture Holding |
| D MARKET Electronic |
Oriental Culture and D MARKET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Culture and D MARKET
The main advantage of trading using opposite Oriental Culture and D MARKET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Culture position performs unexpectedly, D MARKET 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 D MARKET will offset losses from the drop in D MARKET's long position.| Oriental Culture vs. Hour Loop | Oriental Culture vs. Jowell Global | Oriental Culture vs. Qurate Retail Series | Oriental Culture vs. Emerge Commerce |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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