Correlation Between Nam Hwa and SK IE
Can any of the company-specific risk be diversified away by investing in both Nam Hwa and SK IE 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 SK IE 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 SK IE Technology, you can compare the effects of market volatilities on Nam Hwa and SK IE 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 SK IE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nam Hwa and SK IE.
Diversification Opportunities for Nam Hwa and SK IE
Average diversification
The 3 months correlation between Nam and 361610 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nam Hwa Construction and SK IE Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK IE Technology 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 SK IE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK IE Technology has no effect on the direction of Nam Hwa i.e., Nam Hwa and SK IE go up and down completely randomly.
Pair Corralation between Nam Hwa and SK IE
Assuming the 90 days trading horizon Nam Hwa Construction is expected to under-perform the SK IE. But the stock apears to be less risky and, when comparing its historical volatility, Nam Hwa Construction is 1.26 times less risky than SK IE. The stock trades about -0.06 of its potential returns per unit of risk. The SK IE Technology is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 5,780,000 in SK IE Technology on September 12, 2024 and sell it today you would lose (3,415,000) from holding SK IE Technology or give up 59.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nam Hwa Construction vs. SK IE Technology
Performance |
| Timeline |
| Nam Hwa Construction |
| SK IE Technology |
Nam Hwa and SK IE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nam Hwa and SK IE
The main advantage of trading using opposite Nam Hwa and SK IE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nam Hwa position performs unexpectedly, SK IE 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 SK IE will offset losses from the drop in SK IE's long position.| Nam Hwa vs. Korea New Network | Nam Hwa vs. Solution Advanced Technology | Nam Hwa vs. Busan Industrial Co | Nam Hwa vs. Busan Ind |
| SK IE vs. Daejung Chemicals Metals | SK IE vs. DC Media Co | SK IE vs. ChipsMedia | SK IE vs. Daewon Media 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |