Correlation Between IC Technology and Nasmedia
Can any of the company-specific risk be diversified away by investing in both IC Technology 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 IC Technology and Nasmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IC Technology Co and Nasmedia Co, you can compare the effects of market volatilities on IC Technology 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 IC Technology with a short position of Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of IC Technology and Nasmedia.
Diversification Opportunities for IC Technology and Nasmedia
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 052860 and Nasmedia is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding IC Technology Co and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia and IC Technology 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 IC Technology 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 IC Technology i.e., IC Technology and Nasmedia go up and down completely randomly.
Pair Corralation between IC Technology and Nasmedia
Assuming the 90 days trading horizon IC Technology Co is expected to under-perform the Nasmedia. In addition to that, IC Technology is 1.48 times more volatile than Nasmedia Co. It trades about -0.03 of its total potential returns per unit of risk. Nasmedia Co is currently generating about -0.04 per unit of volatility. If you would invest 2,184,917 in Nasmedia Co on August 31, 2024 and sell it today you would lose (737,917) from holding Nasmedia Co or give up 33.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IC Technology Co vs. Nasmedia Co
Performance |
| Timeline |
| IC Technology |
| Nasmedia |
IC Technology and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IC Technology and Nasmedia
The main advantage of trading using opposite IC Technology and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IC Technology 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.| IC Technology vs. Korean Drug Co | IC Technology vs. InfoBank | IC Technology vs. Echomarketing CoLtd | IC Technology vs. KakaoBank Corp |
| Nasmedia vs. Ni Steel | Nasmedia vs. Eagle Veterinary Technology | Nasmedia vs. Daechang Steel Co | Nasmedia vs. Netmarble Games Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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