Correlation Between DJ Mediaprint and Uniinfo Telecom

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

Diversification Opportunities for DJ Mediaprint and Uniinfo Telecom

0.45

Correlation Coefficient

DJ Mediaprint  Uniinfo Telecom

Very weak diversification

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

Pair Corralation between DJ Mediaprint and Uniinfo Telecom

Assuming the 90 days trading horizon DJ Mediaprint Logistics is expected to generate 0.76 times more return on investment than Uniinfo Telecom. However, DJ Mediaprint Logistics is 1.32 times less risky than Uniinfo Telecom. It trades about 0.6 of its potential returns per unit of risk. Uniinfo Telecom Services is currently generating about 0.2 per unit of risk. If you would invest  12,859  in DJ Mediaprint Logistics on September 24, 2024 and sell it today you would earn a total of  6,935  from holding DJ Mediaprint Logistics or generate 53.93% return on investment over 90 days.

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

DJ Mediaprint Logistics  vs.  Uniinfo Telecom Services

DJ Mediaprint Logistics

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DJ Mediaprint Logistics are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, DJ Mediaprint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Uniinfo Telecom Services

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Uniinfo Telecom Services are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Uniinfo Telecom is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with DJ Mediaprint and Uniinfo Telecom

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

The idea behind DJ Mediaprint Logistics and Uniinfo Telecom Services 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.