Correlation Between Next Bt and Korea New
Can any of the company-specific risk be diversified away by investing in both Next Bt and Korea New 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 Next Bt and Korea New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Bt Co and Korea New Network, you can compare the effects of market volatilities on Next Bt and Korea New 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 Next Bt with a short position of Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Bt and Korea New.
Diversification Opportunities for Next Bt and Korea New
Excellent diversification
The 3 months correlation between Next and Korea is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Next Bt Co and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network and Next Bt 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 Next Bt Co are associated (or correlated) with Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of Next Bt i.e., Next Bt and Korea New go up and down completely randomly.
Pair Corralation between Next Bt and Korea New
Assuming the 90 days trading horizon Next Bt is expected to generate 2.27 times less return on investment than Korea New. In addition to that, Next Bt is 1.83 times more volatile than Korea New Network. It trades about 0.07 of its total potential returns per unit of risk. Korea New Network is currently generating about 0.31 per unit of volatility. If you would invest 74,300 in Korea New Network on September 13, 2024 and sell it today you would earn a total of 16,300 from holding Korea New Network or generate 21.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Bt Co vs. Korea New Network
Performance |
| Timeline |
| Next Bt |
| Korea New Network |
Next Bt and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Bt and Korea New
The main advantage of trading using opposite Next Bt and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Bt position performs unexpectedly, Korea New 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 Korea New will offset losses from the drop in Korea New's long position.| Next Bt vs. Solution Advanced Technology | Next Bt vs. Guyoung Technology Co | Next Bt vs. Mgame Corp | Next Bt vs. TOPMATERIAL LTD |
| Korea New vs. CJ Seafood Corp | Korea New vs. FoodNamoo | Korea New vs. FOODWELL Co | Korea New vs. Hankukpackage 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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