Correlation Between Korea Information and Nasmedia
Can any of the company-specific risk be diversified away by investing in both Korea Information and Nasmedia 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 Korea Information and Nasmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Communications and Nasmedia Co, you can compare the effects of market volatilities on Korea Information and Nasmedia 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 Korea Information with a short position of Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Nasmedia.
Diversification Opportunities for Korea Information and Nasmedia
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Nasmedia is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia and Korea 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 Korea Information Communications are associated (or correlated) with Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of Korea Information i.e., Korea Information and Nasmedia go up and down completely randomly.
Pair Corralation between Korea Information and Nasmedia
Assuming the 90 days trading horizon Korea Information Communications is expected to generate 0.73 times more return on investment than Nasmedia. However, Korea Information Communications is 1.36 times less risky than Nasmedia. It trades about 0.0 of its potential returns per unit of risk. Nasmedia Co is currently generating about -0.04 per unit of risk. If you would invest 863,000 in Korea Information Communications on August 25, 2024 and sell it today you would lose (45,000) from holding Korea Information Communications or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Communicatio vs. Nasmedia Co
Performance |
| Timeline |
| Korea Information |
| Nasmedia |
Korea Information and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Nasmedia
The main advantage of trading using opposite Korea Information and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia's long position.| Korea Information vs. Korea Real Estate | Korea Information vs. Korea Ratings Co | Korea Information vs. IQuest Co | Korea Information vs. Wonbang Tech Co |
| Nasmedia vs. Shinsegae Information Communication | Nasmedia vs. Korea Information Communications | Nasmedia vs. Wireless Power Amplifier | Nasmedia vs. Pan Entertainment Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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