Correlation Between EBEST Investment and Narae Nanotech
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Narae Nanotech 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 Narae Nanotech 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 Narae Nanotech Corp, you can compare the effects of market volatilities on EBEST Investment and Narae Nanotech 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 Narae Nanotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Narae Nanotech.
Diversification Opportunities for EBEST Investment and Narae Nanotech
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EBEST and Narae is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Narae Nanotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Narae Nanotech Corp 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 Narae Nanotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Narae Nanotech Corp has no effect on the direction of EBEST Investment i.e., EBEST Investment and Narae Nanotech go up and down completely randomly.
Pair Corralation between EBEST Investment and Narae Nanotech
Assuming the 90 days trading horizon EBEST Investment Securities is expected to generate 0.77 times more return on investment than Narae Nanotech. However, EBEST Investment Securities is 1.3 times less risky than Narae Nanotech. It trades about 0.11 of its potential returns per unit of risk. Narae Nanotech Corp is currently generating about -0.55 per unit of risk. If you would invest 387,500 in EBEST Investment Securities on October 28, 2024 and sell it today you would earn a total of 14,000 from holding EBEST Investment Securities or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Narae Nanotech Corp
Performance |
| Timeline |
| EBEST Investment Sec |
| Narae Nanotech Corp |
EBEST Investment and Narae Nanotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Narae Nanotech
The main advantage of trading using opposite EBEST Investment and Narae Nanotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Narae Nanotech 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 Narae Nanotech will offset losses from the drop in Narae Nanotech's long position.| EBEST Investment vs. Samsung Electronics Co | EBEST Investment vs. Samsung Electronics Co | EBEST Investment vs. SK Hynix | EBEST Investment vs. HMM Co |
| Narae Nanotech vs. Sungmoon Electronics Co | Narae Nanotech vs. Nature and Environment | Narae Nanotech vs. BooKook Steel Co | Narae Nanotech vs. ABCO 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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