Correlation Between Hotel Shilla and Narae Nanotech
Can any of the company-specific risk be diversified away by investing in both Hotel Shilla and Narae Nanotech 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 Hotel Shilla and Narae Nanotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Shilla Co and Narae Nanotech Corp, you can compare the effects of market volatilities on Hotel Shilla and Narae Nanotech 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 Hotel Shilla with a short position of Narae Nanotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Shilla and Narae Nanotech.
Diversification Opportunities for Hotel Shilla and Narae Nanotech
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hotel and Narae is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Shilla Co and Narae Nanotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Narae Nanotech Corp and Hotel Shilla 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 Hotel Shilla Co are associated (or correlated) with Narae Nanotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Narae Nanotech Corp has no effect on the direction of Hotel Shilla i.e., Hotel Shilla and Narae Nanotech go up and down completely randomly.
Pair Corralation between Hotel Shilla and Narae Nanotech
Assuming the 90 days trading horizon Hotel Shilla Co is expected to generate 0.16 times more return on investment than Narae Nanotech. However, Hotel Shilla Co is 6.26 times less risky than Narae Nanotech. It trades about -0.09 of its potential returns per unit of risk. Narae Nanotech Corp is currently generating about -0.38 per unit of risk. If you would invest 3,035,000 in Hotel Shilla Co on October 24, 2024 and sell it today you would lose (35,000) from holding Hotel Shilla Co or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Shilla Co vs. Narae Nanotech Corp
Performance |
| Timeline |
| Hotel Shilla |
| Narae Nanotech Corp |
Hotel Shilla and Narae Nanotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Shilla and Narae Nanotech
The main advantage of trading using opposite Hotel Shilla and Narae Nanotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Shilla position performs unexpectedly, Narae Nanotech 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 Narae Nanotech will offset losses from the drop in Narae Nanotech's long position.| Hotel Shilla vs. Industrial Bank | Hotel Shilla vs. Shinil Electronics Co | Hotel Shilla vs. Korea Electronic Certification | Hotel Shilla vs. Seoul Electronics Telecom |
| Narae Nanotech vs. PH Tech Co | Narae Nanotech vs. TS Investment Corp | Narae Nanotech vs. CU Tech Corp | Narae Nanotech vs. SBI Investment KOREA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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