Correlation Between Datamatics Global and Next Mediaworks

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

By analyzing existing cross correlation between Datamatics Global Services and Next Mediaworks Limited, you can compare the effects of market volatilities on Datamatics Global and Next Mediaworks 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 Datamatics Global with a short position of Next Mediaworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datamatics Global and Next Mediaworks.

Diversification Opportunities for Datamatics Global and Next Mediaworks

-0.55

Correlation Coefficient

Datamatics Global  Next Mediaworks

Excellent diversification

The 3 months correlation between Datamatics and Next is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Datamatics Global Services and Next Mediaworks Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Mediaworks and Datamatics Global 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 Datamatics Global Services are associated (or correlated) with Next Mediaworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Mediaworks has no effect on the direction of Datamatics Global i.e., Datamatics Global and Next Mediaworks go up and down completely randomly.

Pair Corralation between Datamatics Global and Next Mediaworks

Assuming the 90 days trading horizon Datamatics Global Services is expected to generate 1.81 times more return on investment than Next Mediaworks. However, Datamatics Global is 1.81 times more volatile than Next Mediaworks Limited. It trades about 0.17 of its potential returns per unit of risk. Next Mediaworks Limited is currently generating about -0.11 per unit of risk. If you would invest  63,350  in Datamatics Global Services on April 24, 2025 and sell it today you would earn a total of  21,275  from holding Datamatics Global Services or generate 33.58% return on investment over 90 days.

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

Datamatics Global Services  vs.  Next Mediaworks Limited

Datamatics Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Datamatics Global Services are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward indicators, Datamatics Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Next Mediaworks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Next Mediaworks Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Datamatics Global and Next Mediaworks

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

The idea behind Datamatics Global Services and Next Mediaworks 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.