Correlation Between Mobase Electronics and DC Media

Can any of the company-specific risk be diversified away by investing in both Mobase Electronics and DC 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 Mobase Electronics and DC Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mobase Electronics CoLtd and DC Media Co, you can compare the effects of market volatilities on Mobase Electronics and DC 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 Mobase Electronics with a short position of DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobase Electronics and DC Media.

Diversification Opportunities for Mobase Electronics and DC Media

-0.21

Correlation Coefficient

Mobase Electronics  DC Media

Very good diversification

The 3 months correlation between Mobase and 263720 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mobase Electronics CoLtd and DC Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC Media and Mobase Electronics 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 Mobase Electronics CoLtd are associated (or correlated) with DC Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC Media has no effect on the direction of Mobase Electronics i.e., Mobase Electronics and DC Media go up and down completely randomly.

Pair Corralation between Mobase Electronics and DC Media

Assuming the 90 days trading horizon Mobase Electronics CoLtd is expected to generate 0.58 times more return on investment than DC Media. However, Mobase Electronics CoLtd is 1.72 times less risky than DC Media. It trades about 0.09 of its potential returns per unit of risk. DC Media Co is currently generating about -0.04 per unit of risk. If you would invest  138,100  in Mobase Electronics CoLtd on December 24, 2024 and sell it today you would earn a total of  11,400  from holding Mobase Electronics CoLtd or generate 8.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mobase Electronics CoLtd  vs.  DC Media Co

Mobase Electronics CoLtd

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mobase Electronics CoLtd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mobase Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

DC Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days DC Media Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Mobase Electronics and DC Media

The main advantage of trading using opposite Mobase Electronics and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobase Electronics position performs unexpectedly, DC 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 DC Media will offset losses from the drop in DC Media's long position.

The idea behind Mobase Electronics CoLtd and DC Media Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.