Correlation Between BooKook Steel and NAU IB
Can any of the company-specific risk be diversified away by investing in both BooKook Steel and NAU IB 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 BooKook Steel and NAU IB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BooKook Steel Co and NAU IB Capital, you can compare the effects of market volatilities on BooKook Steel and NAU IB 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 BooKook Steel with a short position of NAU IB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BooKook Steel and NAU IB.
Diversification Opportunities for BooKook Steel and NAU IB
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BooKook and NAU is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding BooKook Steel Co and NAU IB Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAU IB Capital and BooKook Steel 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 BooKook Steel Co are associated (or correlated) with NAU IB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAU IB Capital has no effect on the direction of BooKook Steel i.e., BooKook Steel and NAU IB go up and down completely randomly.
Pair Corralation between BooKook Steel and NAU IB
Assuming the 90 days trading horizon BooKook Steel Co is expected to under-perform the NAU IB. But the stock apears to be less risky and, when comparing its historical volatility, BooKook Steel Co is 2.99 times less risky than NAU IB. The stock trades about -0.01 of its potential returns per unit of risk. The NAU IB Capital is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 92,900 in NAU IB Capital on September 13, 2024 and sell it today you would earn a total of 36,300 from holding NAU IB Capital or generate 39.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BooKook Steel Co vs. NAU IB Capital
Performance |
| Timeline |
| BooKook Steel |
| NAU IB Capital |
BooKook Steel and NAU IB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BooKook Steel and NAU IB
The main advantage of trading using opposite BooKook Steel and NAU IB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BooKook Steel position performs unexpectedly, NAU IB 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 NAU IB will offset losses from the drop in NAU IB's long position.| BooKook Steel vs. Samsung Electronics Co | BooKook Steel vs. Samsung Electronics Co | BooKook Steel vs. SK Hynix | BooKook Steel vs. POSCO Holdings |
| NAU IB vs. Hanjin Transportation Co | NAU IB vs. Husteel | NAU IB vs. BooKook Steel Co | NAU IB vs. Fine Besteel 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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