Correlation Between NewFlex Technology and Daechang Steel
Can any of the company-specific risk be diversified away by investing in both NewFlex Technology and Daechang Steel 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 Daechang Steel 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 Daechang Steel Co, you can compare the effects of market volatilities on NewFlex Technology and Daechang Steel 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 Daechang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewFlex Technology and Daechang Steel.
Diversification Opportunities for NewFlex Technology and Daechang Steel
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NewFlex and Daechang is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding NewFlex Technology Co and Daechang Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daechang Steel 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 Daechang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daechang Steel has no effect on the direction of NewFlex Technology i.e., NewFlex Technology and Daechang Steel go up and down completely randomly.
Pair Corralation between NewFlex Technology and Daechang Steel
Assuming the 90 days trading horizon NewFlex Technology Co is expected to generate 2.83 times more return on investment than Daechang Steel. However, NewFlex Technology is 2.83 times more volatile than Daechang Steel Co. It trades about 0.33 of its potential returns per unit of risk. Daechang Steel Co is currently generating about 0.35 per unit of risk. If you would invest 432,000 in NewFlex Technology Co on October 12, 2024 and sell it today you would earn a total of 140,000 from holding NewFlex Technology Co or generate 32.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
NewFlex Technology Co vs. Daechang Steel Co
Performance |
| Timeline |
| NewFlex Technology |
| Daechang Steel |
NewFlex Technology and Daechang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewFlex Technology and Daechang Steel
The main advantage of trading using opposite NewFlex Technology and Daechang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewFlex Technology position performs unexpectedly, Daechang Steel 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 Daechang Steel will offset losses from the drop in Daechang Steel's long position.| NewFlex Technology vs. Golden Bridge Investment | NewFlex Technology vs. KTB Investment Securities | NewFlex Technology vs. Kakao Games Corp | NewFlex Technology vs. Atinum Investment Co |
| Daechang Steel vs. Hwangkum Steel Technology | Daechang Steel vs. Industrial Bank | Daechang Steel vs. Clean Science co | Daechang Steel vs. NewFlex Technology 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| CEOs Directory Screen CEOs from public companies around the world |