Correlation Between ENERGYMACHINERY KOREA and Naver
Can any of the company-specific risk be diversified away by investing in both ENERGYMACHINERY KOREA and Naver 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 Naver 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 Naver, you can compare the effects of market volatilities on ENERGYMACHINERY KOREA and Naver 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 Naver. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENERGYMACHINERY KOREA and Naver.
Diversification Opportunities for ENERGYMACHINERY KOREA and Naver
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ENERGYMACHINERY and Naver is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ENERGYMACHINERY KOREA CoLtd and Naver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naver 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 Naver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naver has no effect on the direction of ENERGYMACHINERY KOREA i.e., ENERGYMACHINERY KOREA and Naver go up and down completely randomly.
Pair Corralation between ENERGYMACHINERY KOREA and Naver
Assuming the 90 days trading horizon ENERGYMACHINERY KOREA CoLtd is expected to generate 1.47 times more return on investment than Naver. However, ENERGYMACHINERY KOREA is 1.47 times more volatile than Naver. It trades about 0.47 of its potential returns per unit of risk. Naver is currently generating about -0.09 per unit of risk. If you would invest 177,000 in ENERGYMACHINERY KOREA CoLtd on October 14, 2024 and sell it today you would earn a total of 51,000 from holding ENERGYMACHINERY KOREA CoLtd or generate 28.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENERGYMACHINERY KOREA CoLtd vs. Naver
Performance |
| Timeline |
| ENERGYMACHINERY KOREA |
| Naver |
ENERGYMACHINERY KOREA and Naver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENERGYMACHINERY KOREA and Naver
The main advantage of trading using opposite ENERGYMACHINERY KOREA and Naver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENERGYMACHINERY KOREA position performs unexpectedly, Naver 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 Naver will offset losses from the drop in Naver's long position.| ENERGYMACHINERY KOREA vs. Daejung Chemicals Metals | ENERGYMACHINERY KOREA vs. Korea Information Communications | ENERGYMACHINERY KOREA vs. Mobileleader CoLtd | ENERGYMACHINERY KOREA vs. Automobile Pc |
| Naver vs. Keyang Electric Machinery | Naver vs. Hankook Furniture Co | Naver vs. ENERGYMACHINERY KOREA CoLtd | Naver vs. KEPCO Engineering Construction |
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.
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