Correlation Between Stic Investments and Daewon Media

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

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

Diversification Opportunities for Stic Investments and Daewon Media

0.05

Correlation Coefficient

Stic Investments  Daewon Media

Significant diversification

The 3 months correlation between Stic and Daewon is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media and Stic Investments 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 Stic Investments are associated (or correlated) with Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Stic Investments i.e., Stic Investments and Daewon Media go up and down completely randomly.

Pair Corralation between Stic Investments and Daewon Media

Assuming the 90 days trading horizon Stic Investments is expected to generate 4.74 times less return on investment than Daewon Media. But when comparing it to its historical volatility, Stic Investments is 1.32 times less risky than Daewon Media. It trades about 0.13 of its potential returns per unit of risk. Daewon Media Co is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest  690,897  in Daewon Media Co on October 8, 2024 and sell it today you would earn a total of  157,103  from holding Daewon Media Co or generate 22.74% return on investment over 90 days.

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

Stic Investments  vs.  Daewon Media Co

Stic Investments

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stic Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Stic Investments may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Daewon Media

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Daewon Media Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Daewon Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stic Investments and Daewon Media

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

The idea behind Stic Investments and Daewon 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.