Correlation Between Naver and HuMC
Can any of the company-specific risk be diversified away by investing in both Naver and HuMC 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 HuMC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naver and HuMC Co, you can compare the effects of market volatilities on Naver and HuMC 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 HuMC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naver and HuMC.
Diversification Opportunities for Naver and HuMC
Good diversification
The 3 months correlation between Naver and HuMC is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Naver and HuMC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HuMC 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 HuMC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HuMC has no effect on the direction of Naver i.e., Naver and HuMC go up and down completely randomly.
Pair Corralation between Naver and HuMC
Assuming the 90 days trading horizon Naver is expected to generate 1.87 times more return on investment than HuMC. However, Naver is 1.87 times more volatile than HuMC Co. It trades about 0.12 of its potential returns per unit of risk. HuMC Co is currently generating about -0.07 per unit of risk. If you would invest 15,902,000 in Naver on December 4, 2024 and sell it today you would earn a total of 4,798,000 from holding Naver or generate 30.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naver vs. HuMC Co
Performance |
| Timeline |
| Naver |
| HuMC |
Naver and HuMC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naver and HuMC
The main advantage of trading using opposite Naver and HuMC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naver position performs unexpectedly, HuMC 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 HuMC will offset losses from the drop in HuMC's long position.| Naver vs. E Investment Development | Naver vs. Stic Investments | Naver vs. Mgame Corp | Naver vs. Golden Bridge Investment |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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