Correlation Between Namyang Dairy and Korea New
Can any of the company-specific risk be diversified away by investing in both Namyang Dairy and Korea New 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 Namyang Dairy and Korea New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namyang Dairy and Korea New Network, you can compare the effects of market volatilities on Namyang Dairy and Korea New 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 Namyang Dairy with a short position of Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namyang Dairy and Korea New.
Diversification Opportunities for Namyang Dairy and Korea New
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Namyang and Korea is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Namyang Dairy and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network and Namyang Dairy 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 Namyang Dairy are associated (or correlated) with Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of Namyang Dairy i.e., Namyang Dairy and Korea New go up and down completely randomly.
Pair Corralation between Namyang Dairy and Korea New
Assuming the 90 days trading horizon Namyang Dairy is expected to generate 55.51 times more return on investment than Korea New. However, Namyang Dairy is 55.51 times more volatile than Korea New Network. It trades about 0.12 of its potential returns per unit of risk. Korea New Network is currently generating about 0.03 per unit of risk. If you would invest 5,110,000 in Namyang Dairy on September 13, 2024 and sell it today you would earn a total of 1,210,000 from holding Namyang Dairy or generate 23.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.17% |
| Values | Daily Returns |
Namyang Dairy vs. Korea New Network
Performance |
| Timeline |
| Namyang Dairy |
| Korea New Network |
Namyang Dairy and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namyang Dairy and Korea New
The main advantage of trading using opposite Namyang Dairy and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namyang Dairy position performs unexpectedly, Korea New 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 Korea New will offset losses from the drop in Korea New's long position.| Namyang Dairy vs. Korea New Network | Namyang Dairy vs. ICD Co | Namyang Dairy vs. DYPNF CoLtd | Namyang Dairy vs. Solution Advanced Technology |
| Korea New vs. CJ Seafood Corp | Korea New vs. FoodNamoo | Korea New vs. FOODWELL Co | Korea New vs. Hankukpackage 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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