Correlation Between Daishin Information and Nam Hwa
Can any of the company-specific risk be diversified away by investing in both Daishin Information 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 Daishin Information and Nam Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Information Communications and Nam Hwa Construction, you can compare the effects of market volatilities on Daishin Information 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 Daishin Information with a short position of Nam Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and Nam Hwa.
Diversification Opportunities for Daishin Information and Nam Hwa
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Daishin and Nam is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat 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 Daishin Information 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 Daishin Information Communications 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 Daishin Information i.e., Daishin Information and Nam Hwa go up and down completely randomly.
Pair Corralation between Daishin Information and Nam Hwa
Assuming the 90 days trading horizon Daishin Information Communications is expected to under-perform the Nam Hwa. But the stock apears to be less risky and, when comparing its historical volatility, Daishin Information Communications is 3.37 times less risky than Nam Hwa. The stock trades about -0.14 of its potential returns per unit of risk. The Nam Hwa Construction is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 399,500 in Nam Hwa Construction on August 25, 2024 and sell it today you would earn a total of 10,500 from holding Nam Hwa Construction or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Information Communicat vs. Nam Hwa Construction
Performance |
| Timeline |
| Daishin Information |
| Nam Hwa Construction |
Daishin Information and Nam Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Information and Nam Hwa
The main advantage of trading using opposite Daishin Information and Nam Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information 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.| Daishin Information vs. Korean Drug Co | Daishin Information vs. CU Tech Corp | Daishin Information vs. Ssangyong Information Communication | Daishin Information vs. Shinsegae Information Communication |
| Nam Hwa vs. Samsung Electronics Co | Nam Hwa vs. Samsung Electronics Co | Nam Hwa vs. Hyundai Motor Co | Nam Hwa 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |