Correlation Between Namhae Chemical and IC Technology
Can any of the company-specific risk be diversified away by investing in both Namhae Chemical and IC Technology 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 Namhae Chemical and IC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namhae Chemical and IC Technology Co, you can compare the effects of market volatilities on Namhae Chemical and IC Technology 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 Namhae Chemical with a short position of IC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namhae Chemical and IC Technology.
Diversification Opportunities for Namhae Chemical and IC Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Namhae and 052860 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Namhae Chemical and IC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IC Technology and Namhae 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 Namhae Chemical are associated (or correlated) with IC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IC Technology has no effect on the direction of Namhae Chemical i.e., Namhae Chemical and IC Technology go up and down completely randomly.
Pair Corralation between Namhae Chemical and IC Technology
Assuming the 90 days trading horizon Namhae Chemical is expected to under-perform the IC Technology. But the stock apears to be less risky and, when comparing its historical volatility, Namhae Chemical is 3.99 times less risky than IC Technology. The stock trades about -0.05 of its potential returns per unit of risk. The IC Technology Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 283,000 in IC Technology Co on September 14, 2024 and sell it today you would lose (69,500) from holding IC Technology Co or give up 24.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Namhae Chemical vs. IC Technology Co
Performance |
| Timeline |
| Namhae Chemical |
| IC Technology |
Namhae Chemical and IC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namhae Chemical and IC Technology
The main advantage of trading using opposite Namhae Chemical and IC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namhae Chemical position performs unexpectedly, IC Technology 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 IC Technology will offset losses from the drop in IC Technology's long position.| Namhae Chemical vs. Wireless Power Amplifier | Namhae Chemical vs. CU Tech Corp | Namhae Chemical vs. Vitzro Tech Co | Namhae Chemical vs. Orbitech Co |
| IC Technology vs. Innowireless Co | IC Technology vs. KT Submarine Telecom | IC Technology vs. Netmarble Games Corp | IC Technology vs. Mgame Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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