Correlation Between Next Mediaworks and Datamatics Global

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

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

Diversification Opportunities for Next Mediaworks and Datamatics Global

-0.76

Correlation Coefficient

Next Mediaworks  Datamatics Global

Pay attention - limited upside

The 3 months correlation between Next and Datamatics is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Next Mediaworks Limited and Datamatics Global Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datamatics Global and Next Mediaworks 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 Next Mediaworks Limited are associated (or correlated) with Datamatics Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datamatics Global has no effect on the direction of Next Mediaworks i.e., Next Mediaworks and Datamatics Global go up and down completely randomly.

Pair Corralation between Next Mediaworks and Datamatics Global

Assuming the 90 days trading horizon Next Mediaworks Limited is expected to under-perform the Datamatics Global. But the stock apears to be less risky and, when comparing its historical volatility, Next Mediaworks Limited is 1.68 times less risky than Datamatics Global. The stock trades about -0.11 of its potential returns per unit of risk. The Datamatics Global Services is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  63,350  in Datamatics Global Services on April 24, 2025 and sell it today you would earn a total of  14,085  from holding Datamatics Global Services or generate 22.23% return on investment over 90 days.

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

Next Mediaworks Limited  vs.  Datamatics Global Services

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 uncertain 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.

Datamatics Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Datamatics Global Services are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Datamatics Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Next Mediaworks and Datamatics Global

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

The idea behind Next Mediaworks Limited and Datamatics Global 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.