Correlation Between ABCO Electronics and Neungyule Education
Can any of the company-specific risk be diversified away by investing in both ABCO Electronics and Neungyule Education 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 ABCO Electronics and Neungyule Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABCO Electronics Co and Neungyule Education, you can compare the effects of market volatilities on ABCO Electronics and Neungyule Education 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 ABCO Electronics with a short position of Neungyule Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABCO Electronics and Neungyule Education.
Diversification Opportunities for ABCO Electronics and Neungyule Education
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ABCO and Neungyule is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ABCO Electronics Co and Neungyule Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neungyule Education and ABCO Electronics 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 ABCO Electronics Co are associated (or correlated) with Neungyule Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neungyule Education has no effect on the direction of ABCO Electronics i.e., ABCO Electronics and Neungyule Education go up and down completely randomly.
Pair Corralation between ABCO Electronics and Neungyule Education
Assuming the 90 days trading horizon ABCO Electronics Co is expected to under-perform the Neungyule Education. But the stock apears to be less risky and, when comparing its historical volatility, ABCO Electronics Co is 1.06 times less risky than Neungyule Education. The stock trades about -0.01 of its potential returns per unit of risk. The Neungyule Education is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 373,000 in Neungyule Education on October 14, 2024 and sell it today you would earn a total of 18,500 from holding Neungyule Education or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABCO Electronics Co vs. Neungyule Education
Performance |
| Timeline |
| ABCO Electronics |
| Neungyule Education |
ABCO Electronics and Neungyule Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABCO Electronics and Neungyule Education
The main advantage of trading using opposite ABCO Electronics and Neungyule Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABCO Electronics position performs unexpectedly, Neungyule Education 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 Neungyule Education will offset losses from the drop in Neungyule Education's long position.| ABCO Electronics vs. Kolon Plastics | ABCO Electronics vs. Lotte Chilsung Beverage | ABCO Electronics vs. PI Advanced Materials | ABCO Electronics vs. Hana Materials |
| Neungyule Education vs. ABCO Electronics Co | Neungyule Education vs. Woori Technology Investment | Neungyule Education vs. DB Financial Investment | Neungyule Education vs. Daol Investment Securities |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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