Correlation Between ABCO Electronics and Narae Nanotech
Can any of the company-specific risk be diversified away by investing in both ABCO Electronics and Narae Nanotech 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 Narae Nanotech 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 Narae Nanotech Corp, you can compare the effects of market volatilities on ABCO Electronics and Narae Nanotech 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 Narae Nanotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABCO Electronics and Narae Nanotech.
Diversification Opportunities for ABCO Electronics and Narae Nanotech
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ABCO and Narae is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding ABCO Electronics Co and Narae Nanotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Narae Nanotech Corp 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 Narae Nanotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Narae Nanotech Corp has no effect on the direction of ABCO Electronics i.e., ABCO Electronics and Narae Nanotech go up and down completely randomly.
Pair Corralation between ABCO Electronics and Narae Nanotech
Assuming the 90 days trading horizon ABCO Electronics Co is expected to generate 1.14 times more return on investment than Narae Nanotech. However, ABCO Electronics is 1.14 times more volatile than Narae Nanotech Corp. It trades about 0.48 of its potential returns per unit of risk. Narae Nanotech Corp is currently generating about -0.55 per unit of risk. If you would invest 447,000 in ABCO Electronics Co on October 28, 2024 and sell it today you would earn a total of 123,000 from holding ABCO Electronics Co or generate 27.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABCO Electronics Co vs. Narae Nanotech Corp
Performance |
| Timeline |
| ABCO Electronics |
| Narae Nanotech Corp |
ABCO Electronics and Narae Nanotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABCO Electronics and Narae Nanotech
The main advantage of trading using opposite ABCO Electronics and Narae Nanotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABCO Electronics position performs unexpectedly, Narae Nanotech 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 Narae Nanotech will offset losses from the drop in Narae Nanotech's long position.| ABCO Electronics vs. Sewoon Medical Co | ABCO Electronics vs. SK Chemicals Co | ABCO Electronics vs. Daejung Chemicals Metals | ABCO Electronics vs. Hanwha Chemical Corp |
| Narae Nanotech vs. SBI Investment KOREA | Narae Nanotech vs. Iljin Display | Narae Nanotech vs. EBEST Investment Securities | Narae Nanotech vs. PLAYWITH |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |