Correlation Between GemVaxKAEL CoLtd and Namyang Dairy
Can any of the company-specific risk be diversified away by investing in both GemVaxKAEL CoLtd and Namyang Dairy 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 GemVaxKAEL CoLtd and Namyang Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GemVaxKAEL CoLtd and Namyang Dairy, you can compare the effects of market volatilities on GemVaxKAEL CoLtd and Namyang Dairy 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 GemVaxKAEL CoLtd with a short position of Namyang Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and Namyang Dairy.
Diversification Opportunities for GemVaxKAEL CoLtd and Namyang Dairy
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GemVaxKAEL and Namyang is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd and Namyang Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyang Dairy and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd are associated (or correlated) with Namyang Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namyang Dairy has no effect on the direction of GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and Namyang Dairy go up and down completely randomly.
Pair Corralation between GemVaxKAEL CoLtd and Namyang Dairy
Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 41.3 times less return on investment than Namyang Dairy. But when comparing it to its historical volatility, GemVaxKAEL CoLtd is 18.9 times less risky than Namyang Dairy. It trades about 0.05 of its potential returns per unit of risk. Namyang Dairy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,160,000 in Namyang Dairy on September 24, 2024 and sell it today you would earn a total of 760,000 from holding Namyang Dairy or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.38% |
| Values | Daily Returns |
GemVaxKAEL CoLtd vs. Namyang Dairy
Performance |
| Timeline |
| GemVaxKAEL CoLtd |
| Namyang Dairy |
GemVaxKAEL CoLtd and Namyang Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GemVaxKAEL CoLtd and Namyang Dairy
The main advantage of trading using opposite GemVaxKAEL CoLtd and Namyang Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GemVaxKAEL CoLtd position performs unexpectedly, Namyang Dairy 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 Namyang Dairy will offset losses from the drop in Namyang Dairy's long position.| GemVaxKAEL CoLtd vs. Dongsin Engineering Construction | GemVaxKAEL CoLtd vs. Doosan Fuel Cell | GemVaxKAEL CoLtd vs. Daishin Balance 1 | GemVaxKAEL CoLtd vs. Total Soft Bank |
| Namyang Dairy vs. FoodNamoo | Namyang Dairy vs. Samlip General Foods | Namyang Dairy vs. Organic Special Pet | Namyang Dairy vs. FOODWELL 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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