Correlation Between Tamul Multimedia and DoubleU Games

Can any of the company-specific risk be diversified away by investing in both Tamul Multimedia and DoubleU Games 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 Tamul Multimedia and DoubleU Games into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Tamul Multimedia and DoubleU Games

0.49

Correlation Coefficient

Tamul Multimedia  DoubleU Games

Very weak diversification

The 3 months correlation between Tamul and DoubleU is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Tamul Multimedia Co and DoubleU Games Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleU Games and Tamul Multimedia 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 Tamul Multimedia Co are associated (or correlated) with DoubleU Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleU Games has no effect on the direction of Tamul Multimedia i.e., Tamul Multimedia and DoubleU Games go up and down completely randomly.

Pair Corralation between Tamul Multimedia and DoubleU Games

Assuming the 90 days trading horizon Tamul Multimedia Co is expected to generate 4.46 times more return on investment than DoubleU Games. However, Tamul Multimedia is 4.46 times more volatile than DoubleU Games Co. It trades about 0.01 of its potential returns per unit of risk. DoubleU Games Co is currently generating about -0.05 per unit of risk. If you would invest  439,500  in Tamul Multimedia Co on December 24, 2024 and sell it today you would lose (29,000) from holding Tamul Multimedia Co or give up 6.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.28%
Values	Daily Returns

Tamul Multimedia Co  vs.  DoubleU Games Co

Tamul Multimedia

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tamul Multimedia Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Tamul Multimedia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

DoubleU Games

Risk-Adjusted Performance

Very Weak

Over the last 90 days DoubleU Games Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, DoubleU Games is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tamul Multimedia and DoubleU Games

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

The idea behind Tamul Multimedia Co and DoubleU Games 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.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.