Correlation Between Namyang Dairy and GemVaxKAEL CoLtd
Can any of the company-specific risk be diversified away by investing in both Namyang Dairy and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namyang Dairy and GemVaxKAEL CoLtd, you can compare the effects of market volatilities on Namyang Dairy and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namyang Dairy and GemVaxKAEL CoLtd.
Diversification Opportunities for Namyang Dairy and GemVaxKAEL CoLtd
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Namyang and GemVaxKAEL is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Namyang Dairy and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of Namyang Dairy i.e., Namyang Dairy and GemVaxKAEL CoLtd go up and down completely randomly.
Pair Corralation between Namyang Dairy and GemVaxKAEL CoLtd
Assuming the 90 days trading horizon Namyang Dairy is expected to under-perform the GemVaxKAEL CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Namyang Dairy is 2.38 times less risky than GemVaxKAEL CoLtd. The stock trades about -0.19 of its potential returns per unit of risk. The GemVaxKAEL CoLtd is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,447,000 in GemVaxKAEL CoLtd on September 24, 2024 and sell it today you would lose (62,000) from holding GemVaxKAEL CoLtd or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namyang Dairy vs. GemVaxKAEL CoLtd
Performance |
| Timeline |
| Namyang Dairy |
| GemVaxKAEL CoLtd |
Namyang Dairy and GemVaxKAEL CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namyang Dairy and GemVaxKAEL CoLtd
The main advantage of trading using opposite Namyang Dairy and GemVaxKAEL CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namyang Dairy position performs unexpectedly, GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd will offset losses from the drop in GemVaxKAEL CoLtd's long position.| Namyang Dairy vs. FoodNamoo | Namyang Dairy vs. Samlip General Foods | Namyang Dairy vs. Organic Special Pet | Namyang Dairy vs. FOODWELL Co |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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