Correlation Between Hotel Shilla and Nable Communications
Can any of the company-specific risk be diversified away by investing in both Hotel Shilla and Nable Communications 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 Nable Communications 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 Nable Communications, you can compare the effects of market volatilities on Hotel Shilla and Nable Communications 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 Nable Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Shilla and Nable Communications.
Diversification Opportunities for Hotel Shilla and Nable Communications
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hotel and Nable is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Shilla Co and Nable Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nable Communications 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 Nable Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nable Communications has no effect on the direction of Hotel Shilla i.e., Hotel Shilla and Nable Communications go up and down completely randomly.
Pair Corralation between Hotel Shilla and Nable Communications
Assuming the 90 days trading horizon Hotel Shilla Co is expected to under-perform the Nable Communications. But the stock apears to be less risky and, when comparing its historical volatility, Hotel Shilla Co is 2.89 times less risky than Nable Communications. The stock trades about -0.42 of its potential returns per unit of risk. The Nable Communications is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 664,000 in Nable Communications on November 5, 2024 and sell it today you would lose (23,000) from holding Nable Communications or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Shilla Co vs. Nable Communications
Performance |
| Timeline |
| Hotel Shilla |
| Nable Communications |
Hotel Shilla and Nable Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Shilla and Nable Communications
The main advantage of trading using opposite Hotel Shilla and Nable Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Shilla position performs unexpectedly, Nable Communications 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 Nable Communications will offset losses from the drop in Nable Communications' long position.| Hotel Shilla vs. EBEST Investment Securities | Hotel Shilla vs. SBI Investment KOREA | Hotel Shilla vs. DB Financial Investment | Hotel Shilla vs. LB Investment |
| Nable Communications vs. Samsung Electronics Co | Nable Communications vs. Samsung Electronics Co | Nable Communications vs. Hyundai Motor Co | Nable Communications vs. Hyundai Motor |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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