Correlation Between Ni Steel and Mobile Appliance
Can any of the company-specific risk be diversified away by investing in both Ni Steel and Mobile Appliance 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 Ni Steel and Mobile Appliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ni Steel and Mobile Appliance, you can compare the effects of market volatilities on Ni Steel and Mobile Appliance 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 Ni Steel with a short position of Mobile Appliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ni Steel and Mobile Appliance.
Diversification Opportunities for Ni Steel and Mobile Appliance
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 008260 and Mobile is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ni Steel and Mobile Appliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Appliance and Ni Steel 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 Ni Steel are associated (or correlated) with Mobile Appliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Appliance has no effect on the direction of Ni Steel i.e., Ni Steel and Mobile Appliance go up and down completely randomly.
Pair Corralation between Ni Steel and Mobile Appliance
Assuming the 90 days trading horizon Ni Steel is expected to under-perform the Mobile Appliance. But the stock apears to be less risky and, when comparing its historical volatility, Ni Steel is 1.14 times less risky than Mobile Appliance. The stock trades about -0.09 of its potential returns per unit of risk. The Mobile Appliance is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 206,500 in Mobile Appliance on September 3, 2024 and sell it today you would earn a total of 6,000 from holding Mobile Appliance or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ni Steel vs. Mobile Appliance
Performance |
| Timeline |
| Ni Steel |
| Mobile Appliance |
Ni Steel and Mobile Appliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ni Steel and Mobile Appliance
The main advantage of trading using opposite Ni Steel and Mobile Appliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ni Steel position performs unexpectedly, Mobile Appliance 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 Mobile Appliance will offset losses from the drop in Mobile Appliance's long position.| Ni Steel vs. Jin Air Co | Ni Steel vs. Automobile Pc | Ni Steel vs. Taegu Broadcasting | Ni Steel vs. AurosTechnology |
| Mobile Appliance vs. Daishin Information Communications | Mobile Appliance vs. BNK Financial Group | Mobile Appliance vs. Jb Financial | Mobile Appliance vs. Shinhan Financial Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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