Correlation Between Nam Hwa and Narae Nanotech
Can any of the company-specific risk be diversified away by investing in both Nam Hwa and Narae Nanotech 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 Nam Hwa and Narae Nanotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nam Hwa Construction and Narae Nanotech Corp, you can compare the effects of market volatilities on Nam Hwa and Narae Nanotech 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 Nam Hwa with a short position of Narae Nanotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Hwa and Narae Nanotech.
Diversification Opportunities for Nam Hwa and Narae Nanotech
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nam and Narae is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nam Hwa Construction and Narae Nanotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Narae Nanotech Corp and Nam Hwa 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 Nam Hwa Construction are associated (or correlated) with Narae Nanotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Narae Nanotech Corp has no effect on the direction of Nam Hwa i.e., Nam Hwa and Narae Nanotech go up and down completely randomly.
Pair Corralation between Nam Hwa and Narae Nanotech
Assuming the 90 days trading horizon Nam Hwa is expected to generate 5.27 times less return on investment than Narae Nanotech. But when comparing it to its historical volatility, Nam Hwa Construction is 1.19 times less risky than Narae Nanotech. It trades about 0.01 of its potential returns per unit of risk. Narae Nanotech Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 393,000 in Narae Nanotech Corp on September 30, 2024 and sell it today you would earn a total of 29,000 from holding Narae Nanotech Corp or generate 7.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nam Hwa Construction vs. Narae Nanotech Corp
Performance |
Timeline |
Nam Hwa Construction |
Narae Nanotech Corp |
Nam Hwa and Narae Nanotech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nam Hwa and Narae Nanotech
The main advantage of trading using opposite Nam Hwa and Narae Nanotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Hwa position performs unexpectedly, Narae Nanotech 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 Narae Nanotech will offset losses from the drop in Narae Nanotech's long position.Nam Hwa vs. Busan Industrial Co | ||
Nam Hwa vs. Busan Ind | ||
Nam Hwa vs. Mirae Asset Daewoo | ||
Nam Hwa vs. Shinhan WTI Futures |
Narae Nanotech vs. Dawonsys CoLtd | ||
Narae Nanotech vs. Elentec Co | ||
Narae Nanotech vs. Robostar CoLtd | ||
Narae Nanotech vs. HyVision System |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
CEOs Directory Screen CEOs from public companies around the world | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |