Correlation Between Naver and Hankukpackage
Can any of the company-specific risk be diversified away by investing in both Naver and Hankukpackage 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 Naver and Hankukpackage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naver and Hankukpackage Co, you can compare the effects of market volatilities on Naver and Hankukpackage 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 Naver with a short position of Hankukpackage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naver and Hankukpackage.
Diversification Opportunities for Naver and Hankukpackage
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Naver and Hankukpackage is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Naver and Hankukpackage Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankukpackage and Naver 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 Naver are associated (or correlated) with Hankukpackage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankukpackage has no effect on the direction of Naver i.e., Naver and Hankukpackage go up and down completely randomly.
Pair Corralation between Naver and Hankukpackage
Assuming the 90 days trading horizon Naver is expected to generate 1.0 times more return on investment than Hankukpackage. However, Naver is 1.0 times less risky than Hankukpackage. It trades about 0.16 of its potential returns per unit of risk. Hankukpackage Co is currently generating about -0.01 per unit of risk. If you would invest 16,620,000 in Naver on September 25, 2024 and sell it today you would earn a total of 3,480,000 from holding Naver or generate 20.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Naver vs. Hankukpackage Co
Performance |
Timeline |
Naver |
Hankukpackage |
Naver and Hankukpackage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Naver and Hankukpackage
The main advantage of trading using opposite Naver and Hankukpackage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naver position performs unexpectedly, Hankukpackage 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 Hankukpackage will offset losses from the drop in Hankukpackage's long position.Naver vs. Samsung Electronics Co | Naver vs. Samsung Electronics Co | Naver vs. KB Financial Group | Naver vs. Shinhan Financial Group |
Hankukpackage vs. Pum Tech Korea Co | Hankukpackage vs. Seung Il | Hankukpackage vs. Naver | Hankukpackage vs. Gyeongnam Steel Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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