Correlation Between Nam Hwa and Nice Information
Can any of the company-specific risk be diversified away by investing in both Nam Hwa and Nice Information 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 Nam Hwa and Nice Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nam Hwa Construction and Nice Information Telecommunication, you can compare the effects of market volatilities on Nam Hwa and Nice Information 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 Nam Hwa with a short position of Nice Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Hwa and Nice Information.
Diversification Opportunities for Nam Hwa and Nice Information
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nam and Nice is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nam Hwa Construction and Nice Information Telecommunica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Information Tel and Nam Hwa 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 Nam Hwa Construction are associated (or correlated) with Nice Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice Information Tel has no effect on the direction of Nam Hwa i.e., Nam Hwa and Nice Information go up and down completely randomly.
Pair Corralation between Nam Hwa and Nice Information
Assuming the 90 days trading horizon Nam Hwa Construction is expected to under-perform the Nice Information. In addition to that, Nam Hwa is 1.49 times more volatile than Nice Information Telecommunication. It trades about -0.07 of its total potential returns per unit of risk. Nice Information Telecommunication is currently generating about -0.03 per unit of volatility. If you would invest 2,104,548 in Nice Information Telecommunication on September 1, 2024 and sell it today you would lose (263,548) from holding Nice Information Telecommunication or give up 12.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nam Hwa Construction vs. Nice Information Telecommunica
Performance |
| Timeline |
| Nam Hwa Construction |
| Nice Information Tel |
Nam Hwa and Nice Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Hwa and Nice Information
The main advantage of trading using opposite Nam Hwa and Nice Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Hwa position performs unexpectedly, Nice Information 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 Nice Information will offset losses from the drop in Nice Information's long position.| Nam Hwa vs. Korea New Network | Nam Hwa vs. ICD Co | Nam Hwa vs. DYPNF CoLtd | Nam Hwa vs. Busan Industrial Co |
| Nice Information vs. Dongsin Engineering Construction | Nice Information vs. Doosan Fuel Cell | Nice Information vs. Daishin Balance 1 | Nice Information vs. Total Soft Bank |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |