Correlation Between SS TECH and NEXTIN
Can any of the company-specific risk be diversified away by investing in both SS TECH and NEXTIN 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 NEXTIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and NEXTIN Inc, you can compare the effects of market volatilities on SS TECH and NEXTIN 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 NEXTIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and NEXTIN.
Diversification Opportunities for SS TECH and NEXTIN
Very good diversification
The 3 months correlation between 101490 and NEXTIN is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH and NEXTIN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXTIN Inc 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 NEXTIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXTIN Inc has no effect on the direction of SS TECH i.e., SS TECH and NEXTIN go up and down completely randomly.
Pair Corralation between SS TECH and NEXTIN
Assuming the 90 days trading horizon SS TECH is expected to under-perform the NEXTIN. In addition to that, SS TECH is 1.11 times more volatile than NEXTIN Inc. It trades about -0.07 of its total potential returns per unit of risk. NEXTIN Inc is currently generating about -0.02 per unit of volatility. If you would invest 6,880,000 in NEXTIN Inc on August 29, 2024 and sell it today you would lose (1,320,000) from holding NEXTIN Inc or give up 19.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. NEXTIN Inc
Performance |
| Timeline |
| SS TECH |
| NEXTIN Inc |
SS TECH and NEXTIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and NEXTIN
The main advantage of trading using opposite SS TECH and NEXTIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH position performs unexpectedly, NEXTIN 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 NEXTIN will offset losses from the drop in NEXTIN's long position.| SS TECH vs. Daou Data Corp | SS TECH vs. Busan Industrial Co | SS TECH vs. Busan Ind | SS TECH vs. Shinhan WTI Futures |
| NEXTIN vs. Parksystems Corp | NEXTIN vs. LEENO Industrial | NEXTIN vs. Tesna Inc | NEXTIN vs. Tokai Carbon Korea |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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