Correlation Between Cheryong Electric and Narae Nanotech
Can any of the company-specific risk be diversified away by investing in both Cheryong Electric and Narae Nanotech 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 Cheryong Electric and Narae Nanotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheryong Electric CoLtd and Narae Nanotech Corp, you can compare the effects of market volatilities on Cheryong Electric and Narae Nanotech 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 Cheryong Electric with a short position of Narae Nanotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheryong Electric and Narae Nanotech.
Diversification Opportunities for Cheryong Electric and Narae Nanotech
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cheryong and Narae is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cheryong Electric CoLtd and Narae Nanotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Narae Nanotech Corp and Cheryong Electric 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 Cheryong Electric CoLtd are associated (or correlated) with Narae Nanotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Narae Nanotech Corp has no effect on the direction of Cheryong Electric i.e., Cheryong Electric and Narae Nanotech go up and down completely randomly.
Pair Corralation between Cheryong Electric and Narae Nanotech
Assuming the 90 days trading horizon Cheryong Electric CoLtd is expected to under-perform the Narae Nanotech. In addition to that, Cheryong Electric is 1.31 times more volatile than Narae Nanotech Corp. It trades about -0.04 of its total potential returns per unit of risk. Narae Nanotech Corp is currently generating about 0.21 per unit of volatility. If you would invest 283,500 in Narae Nanotech Corp on September 13, 2024 and sell it today you would earn a total of 43,000 from holding Narae Nanotech Corp or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheryong Electric CoLtd vs. Narae Nanotech Corp
Performance |
| Timeline |
| Cheryong Electric CoLtd |
| Narae Nanotech Corp |
Cheryong Electric and Narae Nanotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheryong Electric and Narae Nanotech
The main advantage of trading using opposite Cheryong Electric and Narae Nanotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheryong Electric position performs unexpectedly, Narae Nanotech 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 Narae Nanotech will offset losses from the drop in Narae Nanotech's long position.| Cheryong Electric vs. KT Submarine Telecom | Cheryong Electric vs. ECSTELECOM Co | Cheryong Electric vs. Nam Hwa Construction | Cheryong Electric vs. Semyung Electric Machinery |
| Narae Nanotech vs. HyVision System | Narae Nanotech vs. Daebo Magnetic CoLtd | Narae Nanotech vs. Vitzro Tech Co | Narae Nanotech vs. Solution Advanced Technology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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