Correlation Between Sewoon Medical and Narae Nanotech
Can any of the company-specific risk be diversified away by investing in both Sewoon Medical and Narae Nanotech 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 Sewoon Medical and Narae Nanotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sewoon Medical Co and Narae Nanotech Corp, you can compare the effects of market volatilities on Sewoon Medical and Narae Nanotech 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 Sewoon Medical with a short position of Narae Nanotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and Narae Nanotech.
Diversification Opportunities for Sewoon Medical and Narae Nanotech
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sewoon and Narae is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical Co and Narae Nanotech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Narae Nanotech Corp and Sewoon Medical 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 Sewoon Medical Co are associated (or correlated) with Narae Nanotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Narae Nanotech Corp has no effect on the direction of Sewoon Medical i.e., Sewoon Medical and Narae Nanotech go up and down completely randomly.
Pair Corralation between Sewoon Medical and Narae Nanotech
Assuming the 90 days trading horizon Sewoon Medical Co is expected to generate 0.39 times more return on investment than Narae Nanotech. However, Sewoon Medical Co is 2.55 times less risky than Narae Nanotech. It trades about 0.15 of its potential returns per unit of risk. Narae Nanotech Corp is currently generating about -0.59 per unit of risk. If you would invest 239,570 in Sewoon Medical Co on October 25, 2024 and sell it today you would earn a total of 8,430 from holding Sewoon Medical Co or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sewoon Medical Co vs. Narae Nanotech Corp
Performance |
| Timeline |
| Sewoon Medical |
| Narae Nanotech Corp |
Sewoon Medical and Narae Nanotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sewoon Medical and Narae Nanotech
The main advantage of trading using opposite Sewoon Medical and Narae Nanotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical position performs unexpectedly, Narae Nanotech 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 Narae Nanotech will offset losses from the drop in Narae Nanotech's long position.| Sewoon Medical vs. Youngsin Metal Industrial | Sewoon Medical vs. PJ Metal Co | Sewoon Medical vs. Choil Aluminum | Sewoon Medical vs. Korea Information Engineering |
| Narae Nanotech vs. Wireless Power Amplifier | Narae Nanotech vs. Koryo Credit Information | Narae Nanotech vs. Sewoon Medical Co | Narae Nanotech vs. Digital Power Communications |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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