Correlation Between DJ Mediaprint and 360 ONE

Can any of the company-specific risk be diversified away by investing in both DJ Mediaprint and 360 ONE 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 DJ Mediaprint and 360 ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DJ Mediaprint Logistics and 360 ONE WAM, you can compare the effects of market volatilities on DJ Mediaprint and 360 ONE 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 DJ Mediaprint with a short position of 360 ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DJ Mediaprint and 360 ONE.

Diversification Opportunities for DJ Mediaprint and 360 ONE

0.89

Correlation Coefficient

DJ Mediaprint  360 ONE

Very poor diversification

The 3 months correlation between DJML and 360 is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding DJ Mediaprint Logistics and 360 ONE WAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 ONE WAM and DJ Mediaprint 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 DJ Mediaprint Logistics are associated (or correlated) with 360 ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 360 ONE WAM has no effect on the direction of DJ Mediaprint i.e., DJ Mediaprint and 360 ONE go up and down completely randomly.

Pair Corralation between DJ Mediaprint and 360 ONE

Assuming the 90 days trading horizon DJ Mediaprint Logistics is expected to under-perform the 360 ONE. In addition to that, DJ Mediaprint is 1.01 times more volatile than 360 ONE WAM. It trades about -0.26 of its total potential returns per unit of risk. 360 ONE WAM is currently generating about -0.13 per unit of volatility. If you would invest  123,635  in 360 ONE WAM on October 25, 2024 and sell it today you would lose (8,740) from holding 360 ONE WAM or give up 7.07% of portfolio value over 90 days.

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

DJ Mediaprint Logistics  vs.  360 ONE WAM

DJ Mediaprint Logistics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DJ Mediaprint Logistics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, DJ Mediaprint unveiled solid returns over the last few months and may actually be approaching a breakup point.

360 ONE WAM

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 360 ONE WAM are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 360 ONE sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DJ Mediaprint and 360 ONE

The main advantage of trading using opposite DJ Mediaprint and 360 ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DJ Mediaprint position performs unexpectedly, 360 ONE 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 360 ONE will offset losses from the drop in 360 ONE's long position.

The idea behind DJ Mediaprint Logistics and 360 ONE WAM 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.