Correlation Between ICD and Nasmedia
Can any of the company-specific risk be diversified away by investing in both ICD and Nasmedia 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 and Nasmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICD Co and Nasmedia Co, you can compare the effects of market volatilities on ICD and Nasmedia 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 with a short position of Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICD and Nasmedia.
Diversification Opportunities for ICD and Nasmedia
Very poor diversification
The 3 months correlation between ICD and Nasmedia is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding ICD Co and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia and ICD 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 Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of ICD i.e., ICD and Nasmedia go up and down completely randomly.
Pair Corralation between ICD and Nasmedia
Assuming the 90 days trading horizon ICD Co is expected to generate 1.31 times more return on investment than Nasmedia. However, ICD is 1.31 times more volatile than Nasmedia Co. It trades about -0.03 of its potential returns per unit of risk. Nasmedia Co is currently generating about -0.05 per unit of risk. If you would invest 902,443 in ICD Co on September 3, 2024 and sell it today you would lose (406,443) from holding ICD Co or give up 45.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICD Co vs. Nasmedia Co
Performance |
| Timeline |
| ICD Co |
| Nasmedia |
ICD and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICD and Nasmedia
The main advantage of trading using opposite ICD and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICD position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia's long position.| ICD vs. SFA Engineering | ICD vs. APS Holdings | ICD vs. Soulbrain Holdings Co | ICD vs. JUSUNG ENGINEERING Co |
| Nasmedia vs. Korea New Network | Nasmedia vs. ICD Co | Nasmedia vs. DYPNF CoLtd | Nasmedia vs. Busan Industrial 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |