Correlation Between Nepes and Wonik QnC
Can any of the company-specific risk be diversified away by investing in both Nepes and Wonik QnC 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 Nepes and Wonik QnC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nepes and Wonik QnC, you can compare the effects of market volatilities on Nepes and Wonik QnC 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 Nepes with a short position of Wonik QnC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nepes and Wonik QnC.
Diversification Opportunities for Nepes and Wonik QnC
Almost no diversification
The 3 months correlation between Nepes and Wonik is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Nepes and Wonik QnC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonik QnC and Nepes 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 Nepes are associated (or correlated) with Wonik QnC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonik QnC has no effect on the direction of Nepes i.e., Nepes and Wonik QnC go up and down completely randomly.
Pair Corralation between Nepes and Wonik QnC
Assuming the 90 days trading horizon Nepes is expected to generate 1.0 times more return on investment than Wonik QnC. However, Nepes is 1.0 times less risky than Wonik QnC. It trades about -0.15 of its potential returns per unit of risk. Wonik QnC is currently generating about -0.25 per unit of risk. If you would invest 772,000 in Nepes on August 29, 2024 and sell it today you would lose (76,000) from holding Nepes or give up 9.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nepes vs. Wonik QnC
Performance |
| Timeline |
| Nepes |
| Wonik QnC |
Nepes and Wonik QnC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nepes and Wonik QnC
The main advantage of trading using opposite Nepes and Wonik QnC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nepes position performs unexpectedly, Wonik QnC 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 Wonik QnC will offset losses from the drop in Wonik QnC's long position.| Nepes vs. Dongjin Semichem Co | Nepes vs. SFA Semicon Co | Nepes vs. Seoul Semiconductor Co | Nepes vs. EO Technics Co |
| Wonik QnC vs. Genie Music | Wonik QnC vs. LG Display Co | Wonik QnC vs. Sungchang Autotech Co | Wonik QnC vs. Lotte Chilsung Beverage |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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