Correlation Between Namhwa Industrial and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both Namhwa Industrial and Sangsangin Investment 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 Namhwa Industrial and Sangsangin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namhwa Industrial Co and Sangsangin Investment Securities, you can compare the effects of market volatilities on Namhwa Industrial and Sangsangin Investment 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 Namhwa Industrial with a short position of Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namhwa Industrial and Sangsangin Investment.
Diversification Opportunities for Namhwa Industrial and Sangsangin Investment
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Namhwa and Sangsangin is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Namhwa Industrial Co and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment and Namhwa Industrial 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 Namhwa Industrial Co are associated (or correlated) with Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of Namhwa Industrial i.e., Namhwa Industrial and Sangsangin Investment go up and down completely randomly.
Pair Corralation between Namhwa Industrial and Sangsangin Investment
Assuming the 90 days trading horizon Namhwa Industrial Co is expected to generate 1.0 times more return on investment than Sangsangin Investment. However, Namhwa Industrial is 1.0 times more volatile than Sangsangin Investment Securities. It trades about 0.01 of its potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.06 per unit of risk. If you would invest 540,000 in Namhwa Industrial Co on September 26, 2024 and sell it today you would earn a total of 0.00 from holding Namhwa Industrial Co or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Namhwa Industrial Co vs. Sangsangin Investment Securiti
Performance |
Timeline |
Namhwa Industrial |
Sangsangin Investment |
Namhwa Industrial and Sangsangin Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Namhwa Industrial and Sangsangin Investment
The main advantage of trading using opposite Namhwa Industrial and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namhwa Industrial position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.Namhwa Industrial vs. Korea Ratings Co | Namhwa Industrial vs. E Mart | Namhwa Industrial vs. Furonteer | Namhwa Industrial vs. Dongbang Ship Machinery |
Sangsangin Investment vs. KB Financial Group | Sangsangin Investment vs. Shinhan Financial Group | Sangsangin Investment vs. Hyundai Motor | Sangsangin Investment vs. Hyundai Motor 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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