Correlation Between Namhwa Industrial and Neungyule Education
Can any of the company-specific risk be diversified away by investing in both Namhwa Industrial and Neungyule Education 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 Neungyule Education 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 Neungyule Education, you can compare the effects of market volatilities on Namhwa Industrial and Neungyule Education 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 Neungyule Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namhwa Industrial and Neungyule Education.
Diversification Opportunities for Namhwa Industrial and Neungyule Education
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Namhwa and Neungyule is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Namhwa Industrial Co and Neungyule Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neungyule Education 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 Neungyule Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neungyule Education has no effect on the direction of Namhwa Industrial i.e., Namhwa Industrial and Neungyule Education go up and down completely randomly.
Pair Corralation between Namhwa Industrial and Neungyule Education
Assuming the 90 days trading horizon Namhwa Industrial Co is expected to generate 1.0 times more return on investment than Neungyule Education. However, Namhwa Industrial Co is 1.0 times less risky than Neungyule Education. It trades about 0.17 of its potential returns per unit of risk. Neungyule Education is currently generating about -0.06 per unit of risk. If you would invest 510,261 in Namhwa Industrial Co on October 16, 2024 and sell it today you would earn a total of 29,739 from holding Namhwa Industrial Co or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namhwa Industrial Co vs. Neungyule Education
Performance |
| Timeline |
| Namhwa Industrial |
| Neungyule Education |
Namhwa Industrial and Neungyule Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namhwa Industrial and Neungyule Education
The main advantage of trading using opposite Namhwa Industrial and Neungyule Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namhwa Industrial position performs unexpectedly, Neungyule Education 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 Neungyule Education will offset losses from the drop in Neungyule Education's long position.| Namhwa Industrial vs. DSC Investment | Namhwa Industrial vs. Samick Musical Instruments | Namhwa Industrial vs. Coloray International Investment | Namhwa Industrial vs. Golden Bridge Investment |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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