Correlation Between Daelim Trading and Namhwa Industrial
Can any of the company-specific risk be diversified away by investing in both Daelim Trading and Namhwa Industrial 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 Daelim Trading and Namhwa Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daelim Trading Co and Namhwa Industrial Co, you can compare the effects of market volatilities on Daelim Trading and Namhwa Industrial 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 Daelim Trading with a short position of Namhwa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Trading and Namhwa Industrial.
Diversification Opportunities for Daelim Trading and Namhwa Industrial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daelim and Namhwa is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Trading Co and Namhwa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namhwa Industrial and Daelim Trading 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 Daelim Trading Co are associated (or correlated) with Namhwa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namhwa Industrial has no effect on the direction of Daelim Trading i.e., Daelim Trading and Namhwa Industrial go up and down completely randomly.
Pair Corralation between Daelim Trading and Namhwa Industrial
Assuming the 90 days trading horizon Daelim Trading is expected to generate 3.08 times less return on investment than Namhwa Industrial. But when comparing it to its historical volatility, Daelim Trading Co is 1.1 times less risky than Namhwa Industrial. It trades about 0.07 of its potential returns per unit of risk. Namhwa Industrial Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 510,261 in Namhwa Industrial Co on October 17, 2024 and sell it today you would earn a total of 33,739 from holding Namhwa Industrial Co or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daelim Trading Co vs. Namhwa Industrial Co
Performance |
| Timeline |
| Daelim Trading |
| Namhwa Industrial |
Daelim Trading and Namhwa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daelim Trading and Namhwa Industrial
The main advantage of trading using opposite Daelim Trading and Namhwa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Trading position performs unexpectedly, Namhwa Industrial 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 Namhwa Industrial will offset losses from the drop in Namhwa Industrial's long position.| Daelim Trading vs. Mgame Corp | Daelim Trading vs. BIT Computer Co | Daelim Trading vs. Aprogen Healthcare Games | Daelim Trading vs. Netmarble Games Corp |
| Namhwa Industrial vs. Finebesteel | Namhwa Industrial vs. Daelim Trading Co | Namhwa Industrial vs. DB Financial Investment | Namhwa Industrial vs. Fine Besteel 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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