Correlation Between Digital Media and Baosheng Media

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

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

Diversification Opportunities for Digital Media and Baosheng Media

0.65

Correlation Coefficient

Digital Media  Baosheng Media

Poor diversification

The 3 months correlation between Digital and Baosheng is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Digital Media Solutions and Baosheng Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baosheng Media Group and Digital 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 Digital Media Solutions are associated (or correlated) with Baosheng Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baosheng Media Group has no effect on the direction of Digital Media i.e., Digital Media and Baosheng Media go up and down completely randomly.

Pair Corralation between Digital Media and Baosheng Media

If you would invest  32.00  in Digital Media Solutions on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Digital Media Solutions or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Digital Media Solutions  vs.  Baosheng Media Group

Digital Media Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Digital Media Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Digital Media is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Baosheng Media Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baosheng Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Digital Media and Baosheng Media

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

The idea behind Digital Media Solutions and Baosheng Media Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.