Correlation Between MEDICOX and Namyang Dairy
Can any of the company-specific risk be diversified away by investing in both MEDICOX 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 MEDICOX and Namyang Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICOX Co and Namyang Dairy, you can compare the effects of market volatilities on MEDICOX 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 MEDICOX with a short position of Namyang Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICOX and Namyang Dairy.
Diversification Opportunities for MEDICOX and Namyang Dairy
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MEDICOX and Namyang is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding MEDICOX Co and Namyang Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyang Dairy and MEDICOX 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 MEDICOX Co 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 MEDICOX i.e., MEDICOX and Namyang Dairy go up and down completely randomly.
Pair Corralation between MEDICOX and Namyang Dairy
Assuming the 90 days trading horizon MEDICOX Co is expected to generate 0.25 times more return on investment than Namyang Dairy. However, MEDICOX Co is 3.95 times less risky than Namyang Dairy. It trades about -0.01 of its potential returns per unit of risk. Namyang Dairy is currently generating about -0.23 per unit of risk. If you would invest 32,300 in MEDICOX Co on September 13, 2024 and sell it today you would lose (1,100) from holding MEDICOX Co or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MEDICOX Co vs. Namyang Dairy
Performance |
| Timeline |
| MEDICOX |
| Namyang Dairy |
MEDICOX and Namyang Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICOX and Namyang Dairy
The main advantage of trading using opposite MEDICOX and Namyang Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICOX 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.| MEDICOX vs. Sangsangin Investment Securities | MEDICOX vs. Pureun Mutual Savings | MEDICOX vs. Woori Technology Investment | MEDICOX vs. Daelim Trading Co |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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