Correlation Between Nam Hwa and Woorim Machinery
Can any of the company-specific risk be diversified away by investing in both Nam Hwa and Woorim Machinery 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 Woorim Machinery 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 Woorim Machinery Co, you can compare the effects of market volatilities on Nam Hwa and Woorim Machinery 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 Woorim Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Hwa and Woorim Machinery.
Diversification Opportunities for Nam Hwa and Woorim Machinery
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nam and Woorim is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nam Hwa Construction and Woorim Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woorim Machinery 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 Woorim Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woorim Machinery has no effect on the direction of Nam Hwa i.e., Nam Hwa and Woorim Machinery go up and down completely randomly.
Pair Corralation between Nam Hwa and Woorim Machinery
Assuming the 90 days trading horizon Nam Hwa Construction is expected to generate 0.56 times more return on investment than Woorim Machinery. However, Nam Hwa Construction is 1.77 times less risky than Woorim Machinery. It trades about 0.11 of its potential returns per unit of risk. Woorim Machinery Co is currently generating about 0.06 per unit of risk. If you would invest 395,500 in Nam Hwa Construction on November 27, 2024 and sell it today you would earn a total of 12,000 from holding Nam Hwa Construction or generate 3.03% 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. Woorim Machinery Co
Performance |
| Timeline |
| Nam Hwa Construction |
| Woorim Machinery |
Nam Hwa and Woorim Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Hwa and Woorim Machinery
The main advantage of trading using opposite Nam Hwa and Woorim Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Hwa position performs unexpectedly, Woorim Machinery 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 Woorim Machinery will offset losses from the drop in Woorim Machinery's long position.| Nam Hwa vs. Silicon2 Co | Nam Hwa vs. Coloray International Investment | Nam Hwa vs. NewFlex Technology Co | Nam Hwa vs. AeroSpace Technology of |
| Woorim Machinery vs. LG Household Healthcare | Woorim Machinery vs. Sewoon Medical Co | Woorim Machinery vs. DB Financial Investment | Woorim Machinery vs. Green Cross Medical |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |