Correlation Between EBEST Investment and Nuintek CoLtd
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Nuintek CoLtd 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 EBEST Investment and Nuintek CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and Nuintek CoLtd, you can compare the effects of market volatilities on EBEST Investment and Nuintek CoLtd 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 EBEST Investment with a short position of Nuintek CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Nuintek CoLtd.
Diversification Opportunities for EBEST Investment and Nuintek CoLtd
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EBEST and Nuintek is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Nuintek CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuintek CoLtd and EBEST Investment 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 EBEST Investment Securities are associated (or correlated) with Nuintek CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuintek CoLtd has no effect on the direction of EBEST Investment i.e., EBEST Investment and Nuintek CoLtd go up and down completely randomly.
Pair Corralation between EBEST Investment and Nuintek CoLtd
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the Nuintek CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 1.68 times less risky than Nuintek CoLtd. The stock trades about -0.27 of its potential returns per unit of risk. The Nuintek CoLtd is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 54,100 in Nuintek CoLtd on August 31, 2024 and sell it today you would lose (4,000) from holding Nuintek CoLtd or give up 7.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
EBEST Investment Securities vs. Nuintek CoLtd
Performance |
| Timeline |
| EBEST Investment Sec |
| Nuintek CoLtd |
EBEST Investment and Nuintek CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Nuintek CoLtd
The main advantage of trading using opposite EBEST Investment and Nuintek CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Nuintek CoLtd 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 Nuintek CoLtd will offset losses from the drop in Nuintek CoLtd's long position.| EBEST Investment vs. Korean Reinsurance Co | EBEST Investment vs. KakaoBank Corp | EBEST Investment vs. Seoul Food Industrial | EBEST Investment vs. Organic Special Pet |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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