Correlation Between SS TECH and Nasmedia
Can any of the company-specific risk be diversified away by investing in both SS TECH and Nasmedia 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 SS TECH and Nasmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and Nasmedia Co, you can compare the effects of market volatilities on SS TECH and Nasmedia 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 SS TECH with a short position of Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Nasmedia.
Diversification Opportunities for SS TECH and Nasmedia
Very poor diversification
The 3 months correlation between 101490 and Nasmedia is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia and SS TECH 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 SS TECH are associated (or correlated) with Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of SS TECH i.e., SS TECH and Nasmedia go up and down completely randomly.
Pair Corralation between SS TECH and Nasmedia
Assuming the 90 days trading horizon SS TECH is expected to under-perform the Nasmedia. In addition to that, SS TECH is 1.48 times more volatile than Nasmedia Co. It trades about -0.06 of its total potential returns per unit of risk. Nasmedia Co is currently generating about -0.04 per unit of volatility. If you would invest 2,194,628 in Nasmedia Co on September 1, 2024 and sell it today you would lose (747,628) from holding Nasmedia Co or give up 34.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. Nasmedia Co
Performance |
| Timeline |
| SS TECH |
| Nasmedia |
SS TECH and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and Nasmedia
The main advantage of trading using opposite SS TECH and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia's long position.The idea behind SS TECH and Nasmedia 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.| Nasmedia vs. Samlip General Foods | Nasmedia vs. Display Tech Co | Nasmedia vs. Iljin Display | Nasmedia vs. FOODWELL 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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