Correlation Between National Plastic and CG Hi
Can any of the company-specific risk be diversified away by investing in both National Plastic and CG Hi 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 National Plastic and CG Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Plastic Co and CG Hi Tech, you can compare the effects of market volatilities on National Plastic and CG Hi 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 National Plastic with a short position of CG Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Plastic and CG Hi.
Diversification Opportunities for National Plastic and CG Hi
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and 264660 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding National Plastic Co and CG Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CG Hi Tech and National Plastic 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 National Plastic Co are associated (or correlated) with CG Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CG Hi Tech has no effect on the direction of National Plastic i.e., National Plastic and CG Hi go up and down completely randomly.
Pair Corralation between National Plastic and CG Hi
Assuming the 90 days trading horizon National Plastic Co is expected to generate 0.59 times more return on investment than CG Hi. However, National Plastic Co is 1.68 times less risky than CG Hi. It trades about -0.11 of its potential returns per unit of risk. CG Hi Tech is currently generating about -0.36 per unit of risk. If you would invest 271,500 in National Plastic Co on August 29, 2024 and sell it today you would lose (10,500) from holding National Plastic Co or give up 3.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Plastic Co vs. CG Hi Tech
Performance |
| Timeline |
| National Plastic |
| CG Hi Tech |
National Plastic and CG Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Plastic and CG Hi
The main advantage of trading using opposite National Plastic and CG Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Plastic position performs unexpectedly, CG Hi 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 CG Hi will offset losses from the drop in CG Hi's long position.| National Plastic vs. Hanjinkal | National Plastic vs. Samsung Heavy Industries | National Plastic vs. JYP Entertainment |
| CG Hi vs. Ecoplastic | CG Hi vs. EV Advanced Material | CG Hi vs. Sangsin Energy Display | CG Hi vs. National Plastic 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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