Correlation Between DJ Mediaprint and CSB Bank

Can any of the company-specific risk be diversified away by investing in both DJ Mediaprint and CSB Bank 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 CSB Bank 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 CSB Bank Limited, you can compare the effects of market volatilities on DJ Mediaprint and CSB Bank 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 CSB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DJ Mediaprint and CSB Bank.

Diversification Opportunities for DJ Mediaprint and CSB Bank

0.45

Correlation Coefficient

DJ Mediaprint  CSB Bank

Very weak diversification

The 3 months correlation between DJML and CSB is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding DJ Mediaprint Logistics and CSB Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSB Bank Limited 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 CSB Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSB Bank Limited has no effect on the direction of DJ Mediaprint i.e., DJ Mediaprint and CSB Bank go up and down completely randomly.

Pair Corralation between DJ Mediaprint and CSB Bank

Assuming the 90 days trading horizon DJ Mediaprint Logistics is expected to generate 11.03 times more return on investment than CSB Bank. However, DJ Mediaprint is 11.03 times more volatile than CSB Bank Limited. It trades about 0.08 of its potential returns per unit of risk. CSB Bank Limited is currently generating about 0.03 per unit of risk. If you would invest  5,169  in DJ Mediaprint Logistics on October 11, 2024 and sell it today you would earn a total of  12,079  from holding DJ Mediaprint Logistics or generate 233.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

DJ Mediaprint Logistics  vs.  CSB Bank Limited

DJ Mediaprint Logistics

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DJ Mediaprint Logistics are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, DJ Mediaprint unveiled solid returns over the last few months and may actually be approaching a breakup point.

CSB Bank Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSB Bank Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, CSB Bank is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with DJ Mediaprint and CSB Bank

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

The idea behind DJ Mediaprint Logistics and CSB Bank Limited 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.