Correlation Between KPX Green and FoodNamoo
Can any of the company-specific risk be diversified away by investing in both KPX Green and FoodNamoo 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 KPX Green and FoodNamoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KPX Green Chemical and FoodNamoo, you can compare the effects of market volatilities on KPX Green and FoodNamoo 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 KPX Green with a short position of FoodNamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of KPX Green and FoodNamoo.
Diversification Opportunities for KPX Green and FoodNamoo
Excellent diversification
The 3 months correlation between KPX and FoodNamoo is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding KPX Green Chemical and FoodNamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FoodNamoo and KPX Green 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 KPX Green Chemical are associated (or correlated) with FoodNamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FoodNamoo has no effect on the direction of KPX Green i.e., KPX Green and FoodNamoo go up and down completely randomly.
Pair Corralation between KPX Green and FoodNamoo
Assuming the 90 days trading horizon KPX Green Chemical is expected to under-perform the FoodNamoo. In addition to that, KPX Green is 2.8 times more volatile than FoodNamoo. It trades about -0.13 of its total potential returns per unit of risk. FoodNamoo is currently generating about -0.33 per unit of volatility. If you would invest 280,000 in FoodNamoo on November 5, 2024 and sell it today you would lose (24,500) from holding FoodNamoo or give up 8.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KPX Green Chemical vs. FoodNamoo
Performance |
| Timeline |
| KPX Green Chemical |
| FoodNamoo |
KPX Green and FoodNamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KPX Green and FoodNamoo
The main advantage of trading using opposite KPX Green and FoodNamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KPX Green position performs unexpectedly, FoodNamoo 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 FoodNamoo will offset losses from the drop in FoodNamoo's long position.| KPX Green vs. Koryo Credit Information | KPX Green vs. System and Application | KPX Green vs. Woori Financial Group | KPX Green vs. Korea Information Engineering |
| FoodNamoo vs. Maeil Dairies Co | FoodNamoo vs. HYUNDAI FEED | FoodNamoo vs. Neo Cremar Co | FoodNamoo vs. Dongwoo Farm To |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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