Correlation Between Cho Bi and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Cho Bi and NewFlex Technology 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 Cho Bi and NewFlex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cho Bi Co and NewFlex Technology Co, you can compare the effects of market volatilities on Cho Bi and NewFlex Technology 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 Cho Bi with a short position of NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cho Bi and NewFlex Technology.
Diversification Opportunities for Cho Bi and NewFlex Technology
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cho and NewFlex is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cho Bi Co and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology and Cho Bi 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 Cho Bi Co are associated (or correlated) with NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Cho Bi i.e., Cho Bi and NewFlex Technology go up and down completely randomly.
Pair Corralation between Cho Bi and NewFlex Technology
Assuming the 90 days trading horizon Cho Bi Co is expected to under-perform the NewFlex Technology. But the stock apears to be less risky and, when comparing its historical volatility, Cho Bi Co is 1.73 times less risky than NewFlex Technology. The stock trades about -0.22 of its potential returns per unit of risk. The NewFlex Technology Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 504,000 in NewFlex Technology Co on November 28, 2024 and sell it today you would earn a total of 26,000 from holding NewFlex Technology Co or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Cho Bi Co vs. NewFlex Technology Co
Performance |
| Timeline |
| Cho Bi |
| NewFlex Technology |
Cho Bi and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cho Bi and NewFlex Technology
The main advantage of trading using opposite Cho Bi and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cho Bi position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Cho Bi vs. Pureun Mutual Savings | Cho Bi vs. Korea Air Svc | Cho Bi vs. Sempio Foods Co | Cho Bi vs. InfoBank |
| NewFlex Technology vs. People Technology | NewFlex Technology vs. Next Entertainment World | NewFlex Technology vs. SM Entertainment Co | NewFlex Technology vs. MediaZen |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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