Correlation Between Dook Media and Sino-Platinum Metals

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

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

Diversification Opportunities for Dook Media and Sino-Platinum Metals

0.29

Correlation Coefficient

Dook Media  Sino-Platinum Metals

Modest diversification

The 3 months correlation between Dook and Sino-Platinum is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dook Media Group and Sino Platinum Metals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Platinum Metals and Dook Media 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 Dook Media Group are associated (or correlated) with Sino-Platinum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Platinum Metals has no effect on the direction of Dook Media i.e., Dook Media and Sino-Platinum Metals go up and down completely randomly.

Pair Corralation between Dook Media and Sino-Platinum Metals

Assuming the 90 days trading horizon Dook Media Group is expected to generate 3.31 times more return on investment than Sino-Platinum Metals. However, Dook Media is 3.31 times more volatile than Sino Platinum Metals Co. It trades about 0.06 of its potential returns per unit of risk. Sino Platinum Metals Co is currently generating about 0.01 per unit of risk. If you would invest  1,003  in Dook Media Group on December 30, 2024 and sell it today you would earn a total of  106.00  from holding Dook Media Group or generate 10.57% return on investment over 90 days.

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

Dook Media Group  vs.  Sino Platinum Metals Co

Dook Media Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dook Media Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dook Media sustained solid returns over the last few months and may actually be approaching a breakup point.

Sino Platinum Metals

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Dook Media and Sino-Platinum Metals

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

The idea behind Dook Media Group and Sino Platinum Metals 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.