Correlation Between Dragonfly and Nepes
Can any of the company-specific risk be diversified away by investing in both Dragonfly and Nepes 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 Dragonfly and Nepes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dragonfly GF Co and Nepes, you can compare the effects of market volatilities on Dragonfly and Nepes 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 Dragonfly with a short position of Nepes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dragonfly and Nepes.
Diversification Opportunities for Dragonfly and Nepes
Poor diversification
The 3 months correlation between Dragonfly and Nepes is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dragonfly GF Co and Nepes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nepes and Dragonfly 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 Dragonfly GF Co are associated (or correlated) with Nepes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nepes has no effect on the direction of Dragonfly i.e., Dragonfly and Nepes go up and down completely randomly.
Pair Corralation between Dragonfly and Nepes
Assuming the 90 days trading horizon Dragonfly GF Co is expected to under-perform the Nepes. In addition to that, Dragonfly is 1.37 times more volatile than Nepes. It trades about -0.09 of its total potential returns per unit of risk. Nepes is currently generating about -0.1 per unit of volatility. If you would invest 1,635,000 in Nepes on September 2, 2024 and sell it today you would lose (972,000) from holding Nepes or give up 59.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.75% |
| Values | Daily Returns |
Dragonfly GF Co vs. Nepes
Performance |
| Timeline |
| Dragonfly GF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nepes |
Dragonfly and Nepes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dragonfly and Nepes
The main advantage of trading using opposite Dragonfly and Nepes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dragonfly position performs unexpectedly, Nepes 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 Nepes will offset losses from the drop in Nepes' long position.| Dragonfly vs. Iljin Display | Dragonfly vs. Daesung Hi Tech Co | Dragonfly vs. Daou Technology | Dragonfly vs. Hwangkum Steel Technology |
| Nepes vs. Dongjin Semichem Co | Nepes vs. SFA Semicon Co | Nepes vs. Seoul Semiconductor Co | Nepes vs. EO Technics 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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