Correlation Between ISE Commerce and NAU IB
Can any of the company-specific risk be diversified away by investing in both ISE Commerce and NAU IB 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 ISE Commerce and NAU IB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ISE Commerce and NAU IB Capital, you can compare the effects of market volatilities on ISE Commerce and NAU IB 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 ISE Commerce with a short position of NAU IB. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISE Commerce and NAU IB.
Diversification Opportunities for ISE Commerce and NAU IB
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between ISE and NAU is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ISE Commerce and NAU IB Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAU IB Capital and ISE Commerce 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 ISE Commerce are associated (or correlated) with NAU IB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAU IB Capital has no effect on the direction of ISE Commerce i.e., ISE Commerce and NAU IB go up and down completely randomly.
Pair Corralation between ISE Commerce and NAU IB
Assuming the 90 days trading horizon ISE Commerce is expected to under-perform the NAU IB. But the stock apears to be less risky and, when comparing its historical volatility, ISE Commerce is 4.22 times less risky than NAU IB. The stock trades about -0.22 of its potential returns per unit of risk. The NAU IB Capital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 115,000 in NAU IB Capital on November 29, 2024 and sell it today you would earn a total of 4,600 from holding NAU IB Capital or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ISE Commerce vs. NAU IB Capital
Performance |
| Timeline |
| ISE Commerce |
| NAU IB Capital |
ISE Commerce and NAU IB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ISE Commerce and NAU IB
The main advantage of trading using opposite ISE Commerce and NAU IB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ISE Commerce position performs unexpectedly, NAU IB 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 NAU IB will offset losses from the drop in NAU IB's long position.| ISE Commerce vs. Korea Industrial Co | ISE Commerce vs. GAMEVIL | ISE Commerce vs. Nable Communications | ISE Commerce vs. Nice Information Telecommunication |
| NAU IB vs. Seoyon Topmetal Co | NAU IB vs. Kbi Metal Co | NAU IB vs. DONGKUK TED METAL | NAU IB vs. Daeduck Electronics 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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