Correlation Between Nasmedia and Phoenix Materials
Can any of the company-specific risk be diversified away by investing in both Nasmedia and Phoenix Materials 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 Nasmedia and Phoenix Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasmedia Co and Phoenix Materials Co, you can compare the effects of market volatilities on Nasmedia and Phoenix Materials 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 Nasmedia with a short position of Phoenix Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasmedia and Phoenix Materials.
Diversification Opportunities for Nasmedia and Phoenix Materials
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasmedia and Phoenix is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Nasmedia Co and Phoenix Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Materials and Nasmedia 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 Nasmedia Co are associated (or correlated) with Phoenix Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Materials has no effect on the direction of Nasmedia i.e., Nasmedia and Phoenix Materials go up and down completely randomly.
Pair Corralation between Nasmedia and Phoenix Materials
Assuming the 90 days trading horizon Nasmedia is expected to generate 8.69 times less return on investment than Phoenix Materials. But when comparing it to its historical volatility, Nasmedia Co is 1.8 times less risky than Phoenix Materials. It trades about 0.03 of its potential returns per unit of risk. Phoenix Materials Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 69,700 in Phoenix Materials Co on October 14, 2024 and sell it today you would earn a total of 6,300 from holding Phoenix Materials Co or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasmedia Co vs. Phoenix Materials Co
Performance |
| Timeline |
| Nasmedia |
| Phoenix Materials |
Nasmedia and Phoenix Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasmedia and Phoenix Materials
The main advantage of trading using opposite Nasmedia and Phoenix Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasmedia position performs unexpectedly, Phoenix Materials 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 Phoenix Materials will offset losses from the drop in Phoenix Materials' long position.| Nasmedia vs. Samwha Electronics Co | Nasmedia vs. Samji Electronics Co | Nasmedia vs. Korean Air Lines | Nasmedia vs. SungMoon Electronics Co |
| Phoenix Materials vs. Nasmedia Co | Phoenix Materials vs. Barunson Entertainment Arts | Phoenix Materials vs. J Steel Co | Phoenix Materials vs. MediaZen |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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