Correlation Between EE HWA and Nam Hwa
Can any of the company-specific risk be diversified away by investing in both EE HWA and Nam Hwa 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 EE HWA and Nam Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EE HWA Construction Co and Nam Hwa Construction, you can compare the effects of market volatilities on EE HWA and Nam Hwa 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 EE HWA with a short position of Nam Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of EE HWA and Nam Hwa.
Diversification Opportunities for EE HWA and Nam Hwa
Very weak diversification
The 3 months correlation between 001840 and Nam is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding EE HWA Construction Co and Nam Hwa Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Hwa Construction and EE 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 EE HWA Construction Co are associated (or correlated) with Nam Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Hwa Construction has no effect on the direction of EE HWA i.e., EE HWA and Nam Hwa go up and down completely randomly.
Pair Corralation between EE HWA and Nam Hwa
Assuming the 90 days trading horizon EE HWA Construction Co is expected to generate 1.96 times more return on investment than Nam Hwa. However, EE HWA is 1.96 times more volatile than Nam Hwa Construction. It trades about 0.13 of its potential returns per unit of risk. Nam Hwa Construction is currently generating about 0.05 per unit of risk. If you would invest 239,000 in EE HWA Construction Co on August 28, 2024 and sell it today you would earn a total of 46,500 from holding EE HWA Construction Co or generate 19.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EE HWA Construction Co vs. Nam Hwa Construction
Performance |
| Timeline |
| EE HWA Construction |
| Nam Hwa Construction |
EE HWA and Nam Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EE HWA and Nam Hwa
The main advantage of trading using opposite EE HWA and Nam Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EE HWA position performs unexpectedly, Nam Hwa 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 Nam Hwa will offset losses from the drop in Nam Hwa's long position.| EE HWA vs. Hanyang ENG Co | EE HWA vs. Nam Hwa Construction | EE HWA vs. KT Submarine Co | EE HWA vs. Yooshin Engineering |
| Nam Hwa vs. Shin Steel Co | Nam Hwa vs. Moonbae Steel | Nam Hwa vs. Kukdong Oil Chemicals | Nam Hwa vs. Sung Bo Chemicals |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |