Correlation Between Namhwa Industrial and Kumho Industrial
Can any of the company-specific risk be diversified away by investing in both Namhwa Industrial and Kumho Industrial 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 Namhwa Industrial and Kumho Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namhwa Industrial Co and Kumho Industrial Co, you can compare the effects of market volatilities on Namhwa Industrial and Kumho Industrial 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 Namhwa Industrial with a short position of Kumho Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namhwa Industrial and Kumho Industrial.
Diversification Opportunities for Namhwa Industrial and Kumho Industrial
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Namhwa and Kumho is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Namhwa Industrial Co and Kumho Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Industrial and Namhwa Industrial 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 Namhwa Industrial Co are associated (or correlated) with Kumho Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Industrial has no effect on the direction of Namhwa Industrial i.e., Namhwa Industrial and Kumho Industrial go up and down completely randomly.
Pair Corralation between Namhwa Industrial and Kumho Industrial
Assuming the 90 days trading horizon Namhwa Industrial Co is expected to generate 0.65 times more return on investment than Kumho Industrial. However, Namhwa Industrial Co is 1.53 times less risky than Kumho Industrial. It trades about -0.05 of its potential returns per unit of risk. Kumho Industrial Co is currently generating about -0.08 per unit of risk. If you would invest 788,127 in Namhwa Industrial Co on August 30, 2024 and sell it today you would lose (241,127) from holding Namhwa Industrial Co or give up 30.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namhwa Industrial Co vs. Kumho Industrial Co
Performance |
| Timeline |
| Namhwa Industrial |
| Kumho Industrial |
Namhwa Industrial and Kumho Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namhwa Industrial and Kumho Industrial
The main advantage of trading using opposite Namhwa Industrial and Kumho Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namhwa Industrial position performs unexpectedly, Kumho Industrial 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 Kumho Industrial will offset losses from the drop in Kumho Industrial's long position.| Namhwa Industrial vs. Busan Industrial Co | Namhwa Industrial vs. Busan Ind | Namhwa Industrial vs. Shinhan WTI Futures | Namhwa Industrial vs. Finebesteel |
| Kumho Industrial vs. AptaBio Therapeutics | Kumho Industrial vs. Daewoo SBI SPAC | Kumho Industrial vs. Dream Security co | Kumho Industrial vs. Microfriend |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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