Correlation Between Nuintek CoLtd and Daebo Magnetic
Can any of the company-specific risk be diversified away by investing in both Nuintek CoLtd and Daebo Magnetic 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 Nuintek CoLtd and Daebo Magnetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuintek CoLtd and Daebo Magnetic CoLtd, you can compare the effects of market volatilities on Nuintek CoLtd and Daebo Magnetic 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 Nuintek CoLtd with a short position of Daebo Magnetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuintek CoLtd and Daebo Magnetic.
Diversification Opportunities for Nuintek CoLtd and Daebo Magnetic
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuintek and Daebo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nuintek CoLtd and Daebo Magnetic CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daebo Magnetic CoLtd and Nuintek CoLtd 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 Nuintek CoLtd are associated (or correlated) with Daebo Magnetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daebo Magnetic CoLtd has no effect on the direction of Nuintek CoLtd i.e., Nuintek CoLtd and Daebo Magnetic go up and down completely randomly.
Pair Corralation between Nuintek CoLtd and Daebo Magnetic
Assuming the 90 days trading horizon Nuintek CoLtd is expected to generate 0.84 times more return on investment than Daebo Magnetic. However, Nuintek CoLtd is 1.2 times less risky than Daebo Magnetic. It trades about -0.1 of its potential returns per unit of risk. Daebo Magnetic CoLtd is currently generating about -0.09 per unit of risk. If you would invest 245,326 in Nuintek CoLtd on September 2, 2024 and sell it today you would lose (195,126) from holding Nuintek CoLtd or give up 79.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuintek CoLtd vs. Daebo Magnetic CoLtd
Performance |
| Timeline |
| Nuintek CoLtd |
| Daebo Magnetic CoLtd |
Nuintek CoLtd and Daebo Magnetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuintek CoLtd and Daebo Magnetic
The main advantage of trading using opposite Nuintek CoLtd and Daebo Magnetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuintek CoLtd position performs unexpectedly, Daebo Magnetic 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 Daebo Magnetic will offset losses from the drop in Daebo Magnetic's long position.| Nuintek CoLtd vs. Dongsin Engineering Construction | Nuintek CoLtd vs. Doosan Fuel Cell | Nuintek CoLtd vs. Daishin Balance 1 | Nuintek CoLtd vs. Total Soft Bank |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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