Correlation Between NewFlex Technology and Global Standard
Can any of the company-specific risk be diversified away by investing in both NewFlex Technology and Global Standard 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 NewFlex Technology and Global Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewFlex Technology Co and Global Standard Technology, you can compare the effects of market volatilities on NewFlex Technology and Global Standard 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 NewFlex Technology with a short position of Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewFlex Technology and Global Standard.
Diversification Opportunities for NewFlex Technology and Global Standard
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NewFlex and Global is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NewFlex Technology Co and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech and NewFlex Technology 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 NewFlex Technology Co are associated (or correlated) with Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of NewFlex Technology i.e., NewFlex Technology and Global Standard go up and down completely randomly.
Pair Corralation between NewFlex Technology and Global Standard
Assuming the 90 days trading horizon NewFlex Technology Co is expected to generate 1.31 times more return on investment than Global Standard. However, NewFlex Technology is 1.31 times more volatile than Global Standard Technology. It trades about 0.01 of its potential returns per unit of risk. Global Standard Technology is currently generating about -0.03 per unit of risk. If you would invest 498,000 in NewFlex Technology Co on August 28, 2024 and sell it today you would lose (17,500) from holding NewFlex Technology Co or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewFlex Technology Co vs. Global Standard Technology
Performance |
| Timeline |
| NewFlex Technology |
| Global Standard Tech |
NewFlex Technology and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewFlex Technology and Global Standard
The main advantage of trading using opposite NewFlex Technology and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewFlex Technology position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.| NewFlex Technology vs. Hanwha InvestmentSecurities Co | NewFlex Technology vs. SBI Investment KOREA | NewFlex Technology vs. Samyung Trading Co | NewFlex Technology vs. Korea Air Svc |
| Global Standard vs. Korea Real Estate | Global Standard vs. Korea Ratings Co | Global Standard vs. IQuest Co | Global Standard vs. Wonbang Tech 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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