Correlation Between Naver and JW Shinyak
Can any of the company-specific risk be diversified away by investing in both Naver and JW Shinyak 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 Naver and JW Shinyak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naver and JW Shinyak, you can compare the effects of market volatilities on Naver and JW Shinyak 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 Naver with a short position of JW Shinyak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naver and JW Shinyak.
Diversification Opportunities for Naver and JW Shinyak
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naver and 067290 is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Naver and JW Shinyak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JW Shinyak and Naver 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 Naver are associated (or correlated) with JW Shinyak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JW Shinyak has no effect on the direction of Naver i.e., Naver and JW Shinyak go up and down completely randomly.
Pair Corralation between Naver and JW Shinyak
Assuming the 90 days trading horizon Naver is expected to generate 0.86 times more return on investment than JW Shinyak. However, Naver is 1.16 times less risky than JW Shinyak. It trades about 0.02 of its potential returns per unit of risk. JW Shinyak is currently generating about -0.06 per unit of risk. If you would invest 19,300,000 in Naver on September 2, 2024 and sell it today you would earn a total of 1,350,000 from holding Naver or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naver vs. JW Shinyak
Performance |
| Timeline |
| Naver |
| JW Shinyak |
Naver and JW Shinyak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naver and JW Shinyak
The main advantage of trading using opposite Naver and JW Shinyak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naver position performs unexpectedly, JW Shinyak 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 JW Shinyak will offset losses from the drop in JW Shinyak's long position.The idea behind Naver and JW Shinyak pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| JW Shinyak vs. AptaBio Therapeutics | JW Shinyak vs. KT Hitel | JW Shinyak vs. SillaJen | JW Shinyak vs. Cytogen |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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