Correlation Between MEDIANA CoLtd and Dong A

Can any of the company-specific risk be diversified away by investing in both MEDIANA CoLtd and Dong A 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 MEDIANA CoLtd and Dong A into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MEDIANA CoLtd and Dong A Eltek, you can compare the effects of market volatilities on MEDIANA CoLtd and Dong A 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 MEDIANA CoLtd with a short position of Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIANA CoLtd and Dong A.

Diversification Opportunities for MEDIANA CoLtd and Dong A

-0.44

Correlation Coefficient

MEDIANA CoLtd  Dong A

Very good diversification

The 3 months correlation between MEDIANA and Dong is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding MEDIANA CoLtd and Dong A Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Eltek and MEDIANA CoLtd 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 MEDIANA CoLtd are associated (or correlated) with Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Eltek has no effect on the direction of MEDIANA CoLtd i.e., MEDIANA CoLtd and Dong A go up and down completely randomly.

Pair Corralation between MEDIANA CoLtd and Dong A

Assuming the 90 days trading horizon MEDIANA CoLtd is expected to generate 1.34 times more return on investment than Dong A. However, MEDIANA CoLtd is 1.34 times more volatile than Dong A Eltek. It trades about 0.06 of its potential returns per unit of risk. Dong A Eltek is currently generating about -0.16 per unit of risk. If you would invest  446,500  in MEDIANA CoLtd on October 25, 2024 and sell it today you would earn a total of  37,500  from holding MEDIANA CoLtd or generate 8.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

MEDIANA CoLtd  vs.  Dong A Eltek

MEDIANA CoLtd

Risk-Adjusted Performance

4 of 100

Insignificant

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

Dong A Eltek

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dong A Eltek has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with MEDIANA CoLtd and Dong A

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

The idea behind MEDIANA CoLtd and Dong A Eltek 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.