Correlation Between Kyeryong Construction and Nam Hwa
Can any of the company-specific risk be diversified away by investing in both Kyeryong Construction and Nam Hwa 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 Kyeryong Construction and Nam Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyeryong Construction Industrial and Nam Hwa Construction, you can compare the effects of market volatilities on Kyeryong Construction and Nam Hwa 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 Kyeryong Construction with a short position of Nam Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and Nam Hwa.
Diversification Opportunities for Kyeryong Construction and Nam Hwa
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kyeryong and Nam is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri and Nam Hwa Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Hwa Construction and Kyeryong Construction 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 Kyeryong Construction Industrial are associated (or correlated) with Nam Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Hwa Construction has no effect on the direction of Kyeryong Construction i.e., Kyeryong Construction and Nam Hwa go up and down completely randomly.
Pair Corralation between Kyeryong Construction and Nam Hwa
Assuming the 90 days trading horizon Kyeryong Construction is expected to generate 4.17 times less return on investment than Nam Hwa. In addition to that, Kyeryong Construction is 1.11 times more volatile than Nam Hwa Construction. It trades about 0.03 of its total potential returns per unit of risk. Nam Hwa Construction is currently generating about 0.12 per unit of volatility. If you would invest 408,500 in Nam Hwa Construction on September 26, 2024 and sell it today you would earn a total of 17,500 from holding Nam Hwa Construction or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyeryong Construction Industri vs. Nam Hwa Construction
Performance |
| Timeline |
| Kyeryong Construction |
| Nam Hwa Construction |
Kyeryong Construction and Nam Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and Nam Hwa
The main advantage of trading using opposite Kyeryong Construction and Nam Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong Construction position performs unexpectedly, Nam Hwa 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 Nam Hwa will offset losses from the drop in Nam Hwa's long position.| Kyeryong Construction vs. AptaBio Therapeutics | Kyeryong Construction vs. Wonbang Tech Co | Kyeryong Construction vs. Busan Industrial Co | Kyeryong Construction vs. Busan Ind |
| Nam Hwa vs. Busan Industrial Co | Nam Hwa vs. Busan Ind | Nam Hwa vs. Mirae Asset Daewoo | Nam Hwa vs. Shinhan WTI Futures |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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