Correlation Between Refex Industries and DJ Mediaprint

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

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

Diversification Opportunities for Refex Industries and DJ Mediaprint

0.37

Correlation Coefficient

Refex Industries  DJ Mediaprint

Weak diversification

The 3 months correlation between Refex and DJML is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Refex Industries Limited and DJ Mediaprint Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DJ Mediaprint Logistics and Refex Industries 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 Refex Industries Limited are associated (or correlated) with DJ Mediaprint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DJ Mediaprint Logistics has no effect on the direction of Refex Industries i.e., Refex Industries and DJ Mediaprint go up and down completely randomly.

Pair Corralation between Refex Industries and DJ Mediaprint

Assuming the 90 days trading horizon Refex Industries Limited is expected to generate 1.0 times more return on investment than DJ Mediaprint. However, Refex Industries is 1.0 times more volatile than DJ Mediaprint Logistics. It trades about -0.09 of its potential returns per unit of risk. DJ Mediaprint Logistics is currently generating about -0.25 per unit of risk. If you would invest  48,645  in Refex Industries Limited on October 23, 2024 and sell it today you would lose (2,600) from holding Refex Industries Limited or give up 5.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Refex Industries Limited  vs.  DJ Mediaprint Logistics

Refex Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Refex Industries Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Refex Industries is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 unsteady basic indicators, DJ Mediaprint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Refex Industries and DJ Mediaprint

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

The idea behind Refex Industries Limited and DJ Mediaprint Logistics 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.