Correlation Between Digital Multimedia and Aniplus

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

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

Diversification Opportunities for Digital Multimedia and Aniplus

0.28

Correlation Coefficient

Digital Multimedia  Aniplus

Modest diversification

The 3 months correlation between Digital and Aniplus is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and Aniplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aniplus and Digital 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 Digital Multimedia Technology are associated (or correlated) with Aniplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aniplus has no effect on the direction of Digital Multimedia i.e., Digital Multimedia and Aniplus go up and down completely randomly.

Pair Corralation between Digital Multimedia and Aniplus

Assuming the 90 days trading horizon Digital Multimedia Technology is expected to generate 2.12 times more return on investment than Aniplus. However, Digital Multimedia is 2.12 times more volatile than Aniplus. It trades about 0.14 of its potential returns per unit of risk. Aniplus is currently generating about 0.16 per unit of risk. If you would invest  149,000  in Digital Multimedia Technology on December 25, 2024 and sell it today you would earn a total of  51,000  from holding Digital Multimedia Technology or generate 34.23% return on investment over 90 days.

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

Digital Multimedia Technology  vs.  Aniplus

Digital Multimedia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Digital Multimedia Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Digital Multimedia sustained solid returns over the last few months and may actually be approaching a breakup point.

Aniplus

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aniplus are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aniplus sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Digital Multimedia and Aniplus

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

The idea behind Digital Multimedia Technology and Aniplus 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 Stocks Directory module to find actively traded stocks across global markets.