Correlation Between Anam Electronics and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Anam Electronics and NewFlex Technology 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 Anam Electronics and NewFlex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anam Electronics Co and NewFlex Technology Co, you can compare the effects of market volatilities on Anam Electronics and NewFlex Technology 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 Anam Electronics with a short position of NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anam Electronics and NewFlex Technology.
Diversification Opportunities for Anam Electronics and NewFlex Technology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anam and NewFlex is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Anam Electronics Co and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology and Anam Electronics 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 Anam Electronics Co are associated (or correlated) with NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Anam Electronics i.e., Anam Electronics and NewFlex Technology go up and down completely randomly.
Pair Corralation between Anam Electronics and NewFlex Technology
Assuming the 90 days trading horizon Anam Electronics Co is expected to generate 0.92 times more return on investment than NewFlex Technology. However, Anam Electronics Co is 1.09 times less risky than NewFlex Technology. It trades about -0.21 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.27 per unit of risk. If you would invest 127,400 in Anam Electronics Co on August 25, 2024 and sell it today you would lose (12,600) from holding Anam Electronics Co or give up 9.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anam Electronics Co vs. NewFlex Technology Co
Performance |
| Timeline |
| Anam Electronics |
| NewFlex Technology |
Anam Electronics and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anam Electronics and NewFlex Technology
The main advantage of trading using opposite Anam Electronics and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anam Electronics position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Anam Electronics vs. Neungyule Education | Anam Electronics vs. Bohae Brewery | Anam Electronics vs. Pan Entertainment Co | Anam Electronics vs. Daewon Media Co |
| NewFlex Technology vs. Korean Reinsurance Co | NewFlex Technology vs. InfoBank | NewFlex Technology vs. DB Financial Investment | NewFlex Technology vs. Jeju Bank |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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