Correlation Between Aurora World and Namyang Dairy
Can any of the company-specific risk be diversified away by investing in both Aurora World and Namyang Dairy 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 Aurora World and Namyang Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora World and Namyang Dairy, you can compare the effects of market volatilities on Aurora World and Namyang Dairy 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 Aurora World with a short position of Namyang Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora World and Namyang Dairy.
Diversification Opportunities for Aurora World and Namyang Dairy
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aurora and Namyang is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aurora World and Namyang Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyang Dairy and Aurora World 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 Aurora World are associated (or correlated) with Namyang Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namyang Dairy has no effect on the direction of Aurora World i.e., Aurora World and Namyang Dairy go up and down completely randomly.
Pair Corralation between Aurora World and Namyang Dairy
Assuming the 90 days trading horizon Aurora World is expected to generate 0.65 times more return on investment than Namyang Dairy. However, Aurora World is 1.55 times less risky than Namyang Dairy. It trades about 0.03 of its potential returns per unit of risk. Namyang Dairy is currently generating about -0.19 per unit of risk. If you would invest 606,000 in Aurora World on September 24, 2024 and sell it today you would earn a total of 4,000 from holding Aurora World or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora World vs. Namyang Dairy
Performance |
| Timeline |
| Aurora World |
| Namyang Dairy |
Aurora World and Namyang Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora World and Namyang Dairy
The main advantage of trading using opposite Aurora World and Namyang Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora World position performs unexpectedly, Namyang Dairy 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 Namyang Dairy will offset losses from the drop in Namyang Dairy's long position.| Aurora World vs. Woori Technology Investment | Aurora World vs. Samsung Card Co | Aurora World vs. Korea Real Estate | Aurora World vs. CHOROKBAEM PANY Co |
| Namyang Dairy vs. FoodNamoo | Namyang Dairy vs. Samlip General Foods | Namyang Dairy vs. Organic Special Pet | Namyang Dairy vs. FOODWELL Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |