Correlation Between Namhwa Industrial and Cuckoo Homesys
Can any of the company-specific risk be diversified away by investing in both Namhwa Industrial and Cuckoo Homesys 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 Cuckoo Homesys 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 Cuckoo Homesys Co, you can compare the effects of market volatilities on Namhwa Industrial and Cuckoo Homesys 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 Cuckoo Homesys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namhwa Industrial and Cuckoo Homesys.
Diversification Opportunities for Namhwa Industrial and Cuckoo Homesys
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Namhwa and Cuckoo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Namhwa Industrial Co and Cuckoo Homesys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Homesys 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 Cuckoo Homesys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Homesys has no effect on the direction of Namhwa Industrial i.e., Namhwa Industrial and Cuckoo Homesys go up and down completely randomly.
Pair Corralation between Namhwa Industrial and Cuckoo Homesys
Assuming the 90 days trading horizon Namhwa Industrial Co is expected to generate 1.25 times more return on investment than Cuckoo Homesys. However, Namhwa Industrial is 1.25 times more volatile than Cuckoo Homesys Co. It trades about 0.12 of its potential returns per unit of risk. Cuckoo Homesys Co is currently generating about 0.04 per unit of risk. If you would invest 516,037 in Namhwa Industrial Co on October 12, 2024 and sell it today you would earn a total of 21,963 from holding Namhwa Industrial Co or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namhwa Industrial Co vs. Cuckoo Homesys Co
Performance |
| Timeline |
| Namhwa Industrial |
| Cuckoo Homesys |
Namhwa Industrial and Cuckoo Homesys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namhwa Industrial and Cuckoo Homesys
The main advantage of trading using opposite Namhwa Industrial and Cuckoo Homesys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namhwa Industrial position performs unexpectedly, Cuckoo Homesys 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 Cuckoo Homesys will offset losses from the drop in Cuckoo Homesys' long position.| Namhwa Industrial vs. Woori Technology Investment | Namhwa Industrial vs. Hanjin Transportation Co | Namhwa Industrial vs. TS Investment Corp | Namhwa Industrial vs. Taegu Broadcasting |
| Cuckoo Homesys vs. Hyundai Industrial Co | Cuckoo Homesys vs. KTB Investment Securities | Cuckoo Homesys vs. Namhwa Industrial Co | Cuckoo Homesys vs. Pyung Hwa Industrial |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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