Correlation Between Korea New and Cosmax Nbt
Can any of the company-specific risk be diversified away by investing in both Korea New and Cosmax Nbt 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 Korea New and Cosmax Nbt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea New Network and Cosmax Nbt, you can compare the effects of market volatilities on Korea New and Cosmax Nbt 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 Korea New with a short position of Cosmax Nbt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and Cosmax Nbt.
Diversification Opportunities for Korea New and Cosmax Nbt
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and Cosmax is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and Cosmax Nbt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmax Nbt and Korea New 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 Korea New Network are associated (or correlated) with Cosmax Nbt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmax Nbt has no effect on the direction of Korea New i.e., Korea New and Cosmax Nbt go up and down completely randomly.
Pair Corralation between Korea New and Cosmax Nbt
Assuming the 90 days trading horizon Korea New Network is expected to generate 0.78 times more return on investment than Cosmax Nbt. However, Korea New Network is 1.28 times less risky than Cosmax Nbt. It trades about 0.0 of its potential returns per unit of risk. Cosmax Nbt is currently generating about -0.04 per unit of risk. If you would invest 91,747 in Korea New Network on September 12, 2024 and sell it today you would lose (5,747) from holding Korea New Network or give up 6.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea New Network vs. Cosmax Nbt
Performance |
| Timeline |
| Korea New Network |
| Cosmax Nbt |
Korea New and Cosmax Nbt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and Cosmax Nbt
The main advantage of trading using opposite Korea New and Cosmax Nbt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, Cosmax Nbt 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 Cosmax Nbt will offset losses from the drop in Cosmax Nbt's long position.| Korea New vs. BGF Retail Co | Korea New vs. LG Display Co | Korea New vs. Grand Korea Leisure | Korea New vs. Lake Materials Co |
| Cosmax Nbt vs. Korea New Network | Cosmax Nbt vs. ICD Co | Cosmax Nbt vs. DYPNF CoLtd | Cosmax Nbt 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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