Correlation Between Neungyule Education and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Neungyule Education and NewFlex Technology 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 Neungyule Education and NewFlex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neungyule Education and NewFlex Technology Co, you can compare the effects of market volatilities on Neungyule Education and NewFlex Technology 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 Neungyule Education with a short position of NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neungyule Education and NewFlex Technology.
Diversification Opportunities for Neungyule Education and NewFlex Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Neungyule and NewFlex is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Neungyule Education and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology and Neungyule Education 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 Neungyule Education are associated (or correlated) with NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Neungyule Education i.e., Neungyule Education and NewFlex Technology go up and down completely randomly.
Pair Corralation between Neungyule Education and NewFlex Technology
Assuming the 90 days trading horizon Neungyule Education is expected to generate 1.05 times more return on investment than NewFlex Technology. However, Neungyule Education is 1.05 times more volatile than NewFlex Technology Co. It trades about -0.03 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about -0.06 per unit of risk. If you would invest 450,500 in Neungyule Education on September 3, 2024 and sell it today you would lose (110,500) from holding Neungyule Education or give up 24.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neungyule Education vs. NewFlex Technology Co
Performance |
| Timeline |
| Neungyule Education |
| NewFlex Technology |
Neungyule Education and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neungyule Education and NewFlex Technology
The main advantage of trading using opposite Neungyule Education and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neungyule Education position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| Neungyule Education vs. Korea Real Estate | Neungyule Education vs. Busan Industrial Co | Neungyule Education vs. UNISEM Co | Neungyule Education vs. RPBio Inc |
| NewFlex Technology vs. Dongsin Engineering Construction | NewFlex Technology vs. Doosan Fuel Cell | NewFlex Technology vs. Daishin Balance 1 | NewFlex Technology vs. Total Soft Bank |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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