Correlation Between Koh Young and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both Koh Young and NewFlex Technology 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 Koh Young and NewFlex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koh Young Technology and NewFlex Technology Co, you can compare the effects of market volatilities on Koh Young and NewFlex Technology 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 Koh Young with a short position of NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koh Young and NewFlex Technology.
Diversification Opportunities for Koh Young and NewFlex Technology
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Koh and NewFlex is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Koh Young Technology and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology and Koh Young 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 Koh Young Technology are associated (or correlated) with NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of Koh Young i.e., Koh Young and NewFlex Technology go up and down completely randomly.
Pair Corralation between Koh Young and NewFlex Technology
Assuming the 90 days trading horizon Koh Young is expected to generate 10.52 times less return on investment than NewFlex Technology. But when comparing it to its historical volatility, Koh Young Technology is 1.71 times less risky than NewFlex Technology. It trades about 0.03 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 460,500 in NewFlex Technology Co on September 20, 2024 and sell it today you would earn a total of 71,500 from holding NewFlex Technology Co or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koh Young Technology vs. NewFlex Technology Co
Performance |
| Timeline |
| Koh Young Technology |
| NewFlex Technology |
Koh Young and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koh Young and NewFlex Technology
The main advantage of trading using opposite Koh Young and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koh Young position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.The idea behind Koh Young Technology and NewFlex Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NewFlex Technology vs. Cube Entertainment | NewFlex Technology vs. Dreamus Company | NewFlex Technology vs. LG Energy Solution | NewFlex Technology vs. Dongwon System |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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