Correlation Between MediaZen and Korea Refract

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

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

Diversification Opportunities for MediaZen and Korea Refract

-0.27

Correlation Coefficient

MediaZen  Korea Refract

Very good diversification

The 3 months correlation between MediaZen and Korea is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding MediaZen and Korea Refract in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refract and MediaZen 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 MediaZen are associated (or correlated) with Korea Refract. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refract has no effect on the direction of MediaZen i.e., MediaZen and Korea Refract go up and down completely randomly.

Pair Corralation between MediaZen and Korea Refract

If you would invest  1,130,000  in MediaZen on September 12, 2024 and sell it today you would earn a total of  0.00  from holding MediaZen or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

MediaZen  vs.  Korea Refract

MediaZen

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MediaZen are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MediaZen sustained solid returns over the last few months and may actually be approaching a breakup point.

Korea Refract

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Korea Refract 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 MediaZen and Korea Refract

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

The idea behind MediaZen and Korea Refract 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.