Correlation Between Finetechnix CoLtd and Nasmedia
Can any of the company-specific risk be diversified away by investing in both Finetechnix CoLtd 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 Finetechnix CoLtd and Nasmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finetechnix CoLtd and Nasmedia Co, you can compare the effects of market volatilities on Finetechnix CoLtd 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 Finetechnix CoLtd with a short position of Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finetechnix CoLtd and Nasmedia.
Diversification Opportunities for Finetechnix CoLtd and Nasmedia
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Finetechnix and Nasmedia is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Finetechnix CoLtd and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia and Finetechnix CoLtd 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 Finetechnix CoLtd 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 Finetechnix CoLtd i.e., Finetechnix CoLtd and Nasmedia go up and down completely randomly.
Pair Corralation between Finetechnix CoLtd and Nasmedia
Assuming the 90 days trading horizon Finetechnix CoLtd is expected to under-perform the Nasmedia. In addition to that, Finetechnix CoLtd is 1.12 times more volatile than Nasmedia Co. It trades about -0.44 of its total potential returns per unit of risk. Nasmedia Co is currently generating about -0.17 per unit of volatility. If you would invest 1,536,000 in Nasmedia Co on September 1, 2024 and sell it today you would lose (89,000) from holding Nasmedia Co or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finetechnix CoLtd vs. Nasmedia Co
Performance |
| Timeline |
| Finetechnix CoLtd |
| Nasmedia |
Finetechnix CoLtd and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finetechnix CoLtd and Nasmedia
The main advantage of trading using opposite Finetechnix CoLtd and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finetechnix CoLtd 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.| Finetechnix CoLtd vs. Dongsin Engineering Construction | Finetechnix CoLtd vs. Doosan Fuel Cell | Finetechnix CoLtd vs. Daishin Balance 1 | Finetechnix CoLtd vs. Total Soft Bank |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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