Correlation Between Nam Hwa and Samsung Publishing
Can any of the company-specific risk be diversified away by investing in both Nam Hwa and Samsung Publishing 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 Samsung Publishing 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 Samsung Publishing Co, you can compare the effects of market volatilities on Nam Hwa and Samsung Publishing 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 Samsung Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Hwa and Samsung Publishing.
Diversification Opportunities for Nam Hwa and Samsung Publishing
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nam and Samsung is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nam Hwa Construction and Samsung Publishing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Publishing 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 Samsung Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Publishing has no effect on the direction of Nam Hwa i.e., Nam Hwa and Samsung Publishing go up and down completely randomly.
Pair Corralation between Nam Hwa and Samsung Publishing
Assuming the 90 days trading horizon Nam Hwa Construction is expected to under-perform the Samsung Publishing. But the stock apears to be less risky and, when comparing its historical volatility, Nam Hwa Construction is 1.36 times less risky than Samsung Publishing. The stock trades about -0.06 of its potential returns per unit of risk. The Samsung Publishing Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,579,402 in Samsung Publishing Co on October 29, 2024 and sell it today you would lose (1,065,402) from holding Samsung Publishing Co or give up 41.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nam Hwa Construction vs. Samsung Publishing Co
Performance |
| Timeline |
| Nam Hwa Construction |
| Samsung Publishing |
Nam Hwa and Samsung Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Hwa and Samsung Publishing
The main advantage of trading using opposite Nam Hwa and Samsung Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Hwa position performs unexpectedly, Samsung Publishing 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 Samsung Publishing will offset losses from the drop in Samsung Publishing's long position.| Nam Hwa vs. Coloray International Investment | Nam Hwa vs. Leaders Technology Investment | Nam Hwa vs. Daol Investment Securities | Nam Hwa vs. Solution Advanced Technology |
| Samsung Publishing vs. HB Technology TD | Samsung Publishing vs. Eugene Technology CoLtd | Samsung Publishing vs. Puloon Technology | Samsung Publishing vs. Adaptive Plasma Technology |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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