Correlation Between Amogreentech and FoodNamoo
Can any of the company-specific risk be diversified away by investing in both Amogreentech and FoodNamoo 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 Amogreentech and FoodNamoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amogreentech Co and FoodNamoo, you can compare the effects of market volatilities on Amogreentech and FoodNamoo 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 Amogreentech with a short position of FoodNamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amogreentech and FoodNamoo.
Diversification Opportunities for Amogreentech and FoodNamoo
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amogreentech and FoodNamoo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Amogreentech Co and FoodNamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FoodNamoo and Amogreentech 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 Amogreentech Co are associated (or correlated) with FoodNamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FoodNamoo has no effect on the direction of Amogreentech i.e., Amogreentech and FoodNamoo go up and down completely randomly.
Pair Corralation between Amogreentech and FoodNamoo
Assuming the 90 days trading horizon Amogreentech Co is expected to generate 0.87 times more return on investment than FoodNamoo. However, Amogreentech Co is 1.15 times less risky than FoodNamoo. It trades about -0.03 of its potential returns per unit of risk. FoodNamoo is currently generating about -0.05 per unit of risk. If you would invest 1,250,000 in Amogreentech Co on October 11, 2024 and sell it today you would lose (634,000) from holding Amogreentech Co or give up 50.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.82% |
| Values | Daily Returns |
Amogreentech Co vs. FoodNamoo
Performance |
| Timeline |
| Amogreentech |
| FoodNamoo |
Amogreentech and FoodNamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amogreentech and FoodNamoo
The main advantage of trading using opposite Amogreentech and FoodNamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amogreentech position performs unexpectedly, FoodNamoo 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 FoodNamoo will offset losses from the drop in FoodNamoo's long position.| Amogreentech vs. Hyundai Engineering Plastics | Amogreentech vs. ABOV Semiconductor Co | Amogreentech vs. LG Household Healthcare | Amogreentech vs. Samick Musical Instruments |
| FoodNamoo vs. Anam Electronics Co | FoodNamoo vs. Daewoo Electronic Components | FoodNamoo vs. Jeong Moon Information | FoodNamoo vs. Samji Electronics 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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