Correlation Between Seoul Broadcasting and NAU IB
Can any of the company-specific risk be diversified away by investing in both Seoul Broadcasting 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 Seoul Broadcasting and NAU IB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Broadcasting System and NAU IB Capital, you can compare the effects of market volatilities on Seoul Broadcasting 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 Seoul Broadcasting with a short position of NAU IB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Broadcasting and NAU IB.
Diversification Opportunities for Seoul Broadcasting and NAU IB
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Seoul and NAU is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Broadcasting System 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 Seoul Broadcasting 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 Seoul Broadcasting System 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 Seoul Broadcasting i.e., Seoul Broadcasting and NAU IB go up and down completely randomly.
Pair Corralation between Seoul Broadcasting and NAU IB
Assuming the 90 days trading horizon Seoul Broadcasting System is expected to under-perform the NAU IB. But the stock apears to be less risky and, when comparing its historical volatility, Seoul Broadcasting System is 1.32 times less risky than NAU IB. The stock trades about -0.06 of its potential returns per unit of risk. The NAU IB Capital is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 126,069 in NAU IB Capital on September 12, 2024 and sell it today you would lose (8,569) from holding NAU IB Capital or give up 6.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Broadcasting System vs. NAU IB Capital
Performance |
| Timeline |
| Seoul Broadcasting System |
| NAU IB Capital |
Seoul Broadcasting and NAU IB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Broadcasting and NAU IB
The main advantage of trading using opposite Seoul Broadcasting and NAU IB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Broadcasting 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.| Seoul Broadcasting vs. YG Entertainment | Seoul Broadcasting vs. JYP Entertainment | Seoul Broadcasting vs. Cube Entertainment | Seoul Broadcasting vs. FNC Entertainment Co |
| NAU IB vs. Alton Sports CoLtd | NAU IB vs. Neungyule Education | NAU IB vs. Seoul Broadcasting System | NAU IB vs. Jb Financial |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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