Correlation Between ENERGYMACHINERY KOREA and Nongshim
Can any of the company-specific risk be diversified away by investing in both ENERGYMACHINERY KOREA and Nongshim 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 ENERGYMACHINERY KOREA and Nongshim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENERGYMACHINERY KOREA CoLtd and Nongshim, you can compare the effects of market volatilities on ENERGYMACHINERY KOREA and Nongshim 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 ENERGYMACHINERY KOREA with a short position of Nongshim. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENERGYMACHINERY KOREA and Nongshim.
Diversification Opportunities for ENERGYMACHINERY KOREA and Nongshim
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ENERGYMACHINERY and Nongshim is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ENERGYMACHINERY KOREA CoLtd and Nongshim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nongshim and ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA CoLtd are associated (or correlated) with Nongshim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nongshim has no effect on the direction of ENERGYMACHINERY KOREA i.e., ENERGYMACHINERY KOREA and Nongshim go up and down completely randomly.
Pair Corralation between ENERGYMACHINERY KOREA and Nongshim
Assuming the 90 days trading horizon ENERGYMACHINERY KOREA CoLtd is expected to under-perform the Nongshim. In addition to that, ENERGYMACHINERY KOREA is 1.36 times more volatile than Nongshim. It trades about -0.07 of its total potential returns per unit of risk. Nongshim is currently generating about -0.03 per unit of volatility. If you would invest 39,800,000 in Nongshim on September 3, 2024 and sell it today you would lose (5,400,000) from holding Nongshim or give up 13.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENERGYMACHINERY KOREA CoLtd vs. Nongshim
Performance |
| Timeline |
| ENERGYMACHINERY KOREA |
| Nongshim |
ENERGYMACHINERY KOREA and Nongshim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENERGYMACHINERY KOREA and Nongshim
The main advantage of trading using opposite ENERGYMACHINERY KOREA and Nongshim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENERGYMACHINERY KOREA position performs unexpectedly, Nongshim 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 Nongshim will offset losses from the drop in Nongshim's long position.| ENERGYMACHINERY KOREA vs. LG Display | ENERGYMACHINERY KOREA vs. Hyundai Motor | ENERGYMACHINERY KOREA vs. Hyundai Motor Co | ENERGYMACHINERY KOREA vs. Hyundai Motor Co |
| Nongshim vs. LG Display | Nongshim vs. Hyundai Motor | Nongshim vs. Hyundai Motor Co | Nongshim vs. Hyundai Motor 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |