Correlation Between Nam Hwa and Clean Science
Can any of the company-specific risk be diversified away by investing in both Nam Hwa and Clean Science 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 Clean Science 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 Clean Science co, you can compare the effects of market volatilities on Nam Hwa and Clean Science 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 Clean Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Hwa and Clean Science.
Diversification Opportunities for Nam Hwa and Clean Science
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nam and Clean is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nam Hwa Construction and Clean Science co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Science co 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 Clean Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Science co has no effect on the direction of Nam Hwa i.e., Nam Hwa and Clean Science go up and down completely randomly.
Pair Corralation between Nam Hwa and Clean Science
Assuming the 90 days trading horizon Nam Hwa Construction is expected to under-perform the Clean Science. But the stock apears to be less risky and, when comparing its historical volatility, Nam Hwa Construction is 3.12 times less risky than Clean Science. The stock trades about -0.18 of its potential returns per unit of risk. The Clean Science co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 497,000 in Clean Science co on November 6, 2024 and sell it today you would earn a total of 12,000 from holding Clean Science co or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nam Hwa Construction vs. Clean Science co
Performance |
| Timeline |
| Nam Hwa Construction |
| Clean Science co |
Nam Hwa and Clean Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Hwa and Clean Science
The main advantage of trading using opposite Nam Hwa and Clean Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Hwa position performs unexpectedly, Clean Science 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 Clean Science will offset losses from the drop in Clean Science's long position.| Nam Hwa vs. Dongil Steel Co | Nam Hwa vs. Nice Information Telecommunication | Nam Hwa vs. Lotte Data Communication | Nam Hwa vs. Dongbang Transport Logistics |
| Clean Science vs. Eugene Investment Securities | Clean Science vs. Aprogen Healthcare Games | Clean Science vs. Kakao Games Corp | Clean Science vs. Mirai Semiconductors 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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