Correlation Between Konan Technology and DC Media

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

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

Diversification Opportunities for Konan Technology and DC Media

-0.38

Correlation Coefficient

Konan Technology  DC Media

Very good diversification

The 3 months correlation between Konan and 263720 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Konan Technology and DC Media CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC Media CoLtd and Konan Technology 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 Konan Technology are associated (or correlated) with DC Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC Media CoLtd has no effect on the direction of Konan Technology i.e., Konan Technology and DC Media go up and down completely randomly.

Pair Corralation between Konan Technology and DC Media

Assuming the 90 days trading horizon Konan Technology is expected to generate 1.81 times more return on investment than DC Media. However, Konan Technology is 1.81 times more volatile than DC Media CoLtd. It trades about 0.03 of its potential returns per unit of risk. DC Media CoLtd is currently generating about -0.04 per unit of risk. If you would invest  1,962,000  in Konan Technology on December 24, 2024 and sell it today you would earn a total of  48,000  from holding Konan Technology or generate 2.45% return on investment over 90 days.

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

Konan Technology  vs.  DC Media CoLtd

Konan Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Konan Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Konan Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

DC Media CoLtd

Risk-Adjusted Performance

Very Weak

Over the last 90 days DC Media CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Konan Technology and DC Media

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

The idea behind Konan Technology and DC Media CoLtd 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.