Correlation Between Namhwa Industrial and DoubleU Games
Can any of the company-specific risk be diversified away by investing in both Namhwa Industrial and DoubleU Games 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 DoubleU Games 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 DoubleU Games Co, you can compare the effects of market volatilities on Namhwa Industrial and DoubleU Games 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 DoubleU Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namhwa Industrial and DoubleU Games.
Diversification Opportunities for Namhwa Industrial and DoubleU Games
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Namhwa and DoubleU is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Namhwa Industrial Co and DoubleU Games Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleU Games 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 DoubleU Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleU Games has no effect on the direction of Namhwa Industrial i.e., Namhwa Industrial and DoubleU Games go up and down completely randomly.
Pair Corralation between Namhwa Industrial and DoubleU Games
Assuming the 90 days trading horizon Namhwa Industrial Co is expected to under-perform the DoubleU Games. But the stock apears to be less risky and, when comparing its historical volatility, Namhwa Industrial Co is 1.59 times less risky than DoubleU Games. The stock trades about -0.06 of its potential returns per unit of risk. The DoubleU Games Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,745,000 in DoubleU Games Co on August 31, 2024 and sell it today you would earn a total of 245,000 from holding DoubleU Games Co or generate 5.16% 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. DoubleU Games Co
Performance |
| Timeline |
| Namhwa Industrial |
| DoubleU Games |
Namhwa Industrial and DoubleU Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namhwa Industrial and DoubleU Games
The main advantage of trading using opposite Namhwa Industrial and DoubleU Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namhwa Industrial position performs unexpectedly, DoubleU Games 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 DoubleU Games will offset losses from the drop in DoubleU Games' long position.| Namhwa Industrial vs. Busan Industrial Co | Namhwa Industrial vs. Busan Ind | Namhwa Industrial vs. Mirae Asset Daewoo | Namhwa Industrial vs. Finebesteel |
| DoubleU Games vs. DONGKUK TED METAL | DoubleU Games vs. Namhwa Industrial Co | DoubleU Games vs. Hyunwoo Industrial Co | DoubleU Games vs. Cheryong Industrial CoLtd |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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