Correlation Between Mobase Electronics and Nuintek CoLtd
Can any of the company-specific risk be diversified away by investing in both Mobase Electronics and Nuintek CoLtd 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 Mobase Electronics and Nuintek CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobase Electronics CoLtd and Nuintek CoLtd, you can compare the effects of market volatilities on Mobase Electronics and Nuintek CoLtd 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 Mobase Electronics with a short position of Nuintek CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobase Electronics and Nuintek CoLtd.
Diversification Opportunities for Mobase Electronics and Nuintek CoLtd
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mobase and Nuintek is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mobase Electronics CoLtd and Nuintek CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuintek CoLtd and Mobase 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 Mobase Electronics CoLtd are associated (or correlated) with Nuintek CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuintek CoLtd has no effect on the direction of Mobase Electronics i.e., Mobase Electronics and Nuintek CoLtd go up and down completely randomly.
Pair Corralation between Mobase Electronics and Nuintek CoLtd
Assuming the 90 days trading horizon Mobase Electronics CoLtd is expected to generate 0.93 times more return on investment than Nuintek CoLtd. However, Mobase Electronics CoLtd is 1.08 times less risky than Nuintek CoLtd. It trades about -0.19 of its potential returns per unit of risk. Nuintek CoLtd is currently generating about -0.19 per unit of risk. If you would invest 185,300 in Mobase Electronics CoLtd on September 3, 2024 and sell it today you would lose (27,900) from holding Mobase Electronics CoLtd or give up 15.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobase Electronics CoLtd vs. Nuintek CoLtd
Performance |
| Timeline |
| Mobase Electronics CoLtd |
| Nuintek CoLtd |
Mobase Electronics and Nuintek CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobase Electronics and Nuintek CoLtd
The main advantage of trading using opposite Mobase Electronics and Nuintek CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobase Electronics position performs unexpectedly, Nuintek CoLtd 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 Nuintek CoLtd will offset losses from the drop in Nuintek CoLtd's long position.| Mobase Electronics vs. Korea Real Estate | Mobase Electronics vs. Busan Industrial Co | Mobase Electronics vs. UNISEM Co | Mobase Electronics vs. RPBio Inc |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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