Correlation Between Dongnam Chemical and Next Entertainment
Can any of the company-specific risk be diversified away by investing in both Dongnam Chemical and Next Entertainment 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 Dongnam Chemical and Next Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongnam Chemical Co and Next Entertainment World, you can compare the effects of market volatilities on Dongnam Chemical and Next Entertainment 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 Dongnam Chemical with a short position of Next Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongnam Chemical and Next Entertainment.
Diversification Opportunities for Dongnam Chemical and Next Entertainment
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongnam and Next is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dongnam Chemical Co and Next Entertainment World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Entertainment World and Dongnam Chemical 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 Dongnam Chemical Co are associated (or correlated) with Next Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Entertainment World has no effect on the direction of Dongnam Chemical i.e., Dongnam Chemical and Next Entertainment go up and down completely randomly.
Pair Corralation between Dongnam Chemical and Next Entertainment
Assuming the 90 days trading horizon Dongnam Chemical Co is expected to generate 0.45 times more return on investment than Next Entertainment. However, Dongnam Chemical Co is 2.22 times less risky than Next Entertainment. It trades about 0.48 of its potential returns per unit of risk. Next Entertainment World is currently generating about -0.06 per unit of risk. If you would invest 3,095,782 in Dongnam Chemical Co on October 16, 2024 and sell it today you would earn a total of 314,218 from holding Dongnam Chemical Co or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongnam Chemical Co vs. Next Entertainment World
Performance |
| Timeline |
| Dongnam Chemical |
| Next Entertainment World |
Dongnam Chemical and Next Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongnam Chemical and Next Entertainment
The main advantage of trading using opposite Dongnam Chemical and Next Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongnam Chemical position performs unexpectedly, Next Entertainment 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 Next Entertainment will offset losses from the drop in Next Entertainment's long position.| Dongnam Chemical vs. AptaBio Therapeutics | Dongnam Chemical vs. Daewoo SBI SPAC | Dongnam Chemical vs. Dream Security co | Dongnam Chemical vs. Microfriend |
| Next Entertainment vs. Youngchang Chemical Co | Next Entertainment vs. Dongnam Chemical Co | Next Entertainment vs. Namhae Chemical | Next Entertainment vs. LG Household Healthcare |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |