Correlation Between Narae Nanotech and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Narae Nanotech and Ssangyong Information 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 Narae Nanotech and Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Narae Nanotech Corp and Ssangyong Information Communication, you can compare the effects of market volatilities on Narae Nanotech and Ssangyong Information 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 Narae Nanotech with a short position of Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Narae Nanotech and Ssangyong Information.
Diversification Opportunities for Narae Nanotech and Ssangyong Information
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Narae and Ssangyong is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Narae Nanotech Corp and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information and Narae Nanotech 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 Narae Nanotech Corp are associated (or correlated) with Ssangyong Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Information has no effect on the direction of Narae Nanotech i.e., Narae Nanotech and Ssangyong Information go up and down completely randomly.
Pair Corralation between Narae Nanotech and Ssangyong Information
Assuming the 90 days trading horizon Narae Nanotech Corp is expected to generate 2.04 times more return on investment than Ssangyong Information. However, Narae Nanotech is 2.04 times more volatile than Ssangyong Information Communication. It trades about 0.06 of its potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.04 per unit of risk. If you would invest 385,000 in Narae Nanotech Corp on September 24, 2024 and sell it today you would earn a total of 32,500 from holding Narae Nanotech Corp or generate 8.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Narae Nanotech Corp vs. Ssangyong Information Communic
Performance |
Timeline |
Narae Nanotech Corp |
Ssangyong Information |
Narae Nanotech and Ssangyong Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Narae Nanotech and Ssangyong Information
The main advantage of trading using opposite Narae Nanotech and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Narae Nanotech position performs unexpectedly, Ssangyong Information 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 Ssangyong Information will offset losses from the drop in Ssangyong Information's long position.Narae Nanotech vs. Organic Special Pet | Narae Nanotech vs. SBI Investment KOREA | Narae Nanotech vs. Korea Investment Holdings | Narae Nanotech vs. Seoul Food Industrial |
Ssangyong Information vs. Hansol Homedeco Co | Ssangyong Information vs. Air Busan Co | Ssangyong Information vs. Nable Communications | Ssangyong Information vs. ECSTELECOM 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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