Correlation Between ICD Co and Next Bt
Can any of the company-specific risk be diversified away by investing in both ICD Co and Next Bt 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 ICD Co and Next Bt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICD Co and Next Bt Co, you can compare the effects of market volatilities on ICD Co and Next Bt 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 ICD Co with a short position of Next Bt. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICD Co and Next Bt.
Diversification Opportunities for ICD Co and Next Bt
Almost no diversification
The 3 months correlation between ICD and Next is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding ICD Co and Next Bt Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Bt and ICD Co 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 ICD Co are associated (or correlated) with Next Bt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Bt has no effect on the direction of ICD Co i.e., ICD Co and Next Bt go up and down completely randomly.
Pair Corralation between ICD Co and Next Bt
Assuming the 90 days trading horizon ICD Co is expected to generate 0.66 times more return on investment than Next Bt. However, ICD Co is 1.52 times less risky than Next Bt. It trades about -0.04 of its potential returns per unit of risk. Next Bt Co is currently generating about -0.04 per unit of risk. If you would invest 898,532 in ICD Co on September 12, 2024 and sell it today you would lose (473,032) from holding ICD Co or give up 52.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICD Co vs. Next Bt Co
Performance |
| Timeline |
| ICD Co |
| Next Bt |
ICD Co and Next Bt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICD Co and Next Bt
The main advantage of trading using opposite ICD Co and Next Bt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICD Co position performs unexpectedly, Next Bt 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 Next Bt will offset losses from the drop in Next Bt's long position.| ICD Co vs. SFA Engineering | ICD Co vs. APS Holdings | ICD Co vs. Soulbrain Holdings Co | ICD Co vs. JUSUNG ENGINEERING Co |
| Next Bt vs. Korea New Network | Next Bt vs. ICD Co | Next Bt vs. DYPNF CoLtd | Next Bt vs. Solution Advanced Technology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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