Correlation Between Narae Nanotech and SeAH Besteel
Can any of the company-specific risk be diversified away by investing in both Narae Nanotech and SeAH Besteel 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 Narae Nanotech and SeAH Besteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Narae Nanotech Corp and SeAH Besteel Corp, you can compare the effects of market volatilities on Narae Nanotech and SeAH Besteel 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 Narae Nanotech with a short position of SeAH Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Narae Nanotech and SeAH Besteel.
Diversification Opportunities for Narae Nanotech and SeAH Besteel
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Narae and SeAH is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Narae Nanotech Corp and SeAH Besteel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeAH Besteel Corp and Narae Nanotech 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 Narae Nanotech Corp are associated (or correlated) with SeAH Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeAH Besteel Corp has no effect on the direction of Narae Nanotech i.e., Narae Nanotech and SeAH Besteel go up and down completely randomly.
Pair Corralation between Narae Nanotech and SeAH Besteel
Assuming the 90 days trading horizon Narae Nanotech Corp is expected to generate 2.92 times more return on investment than SeAH Besteel. However, Narae Nanotech is 2.92 times more volatile than SeAH Besteel Corp. It trades about -0.05 of its potential returns per unit of risk. SeAH Besteel Corp is currently generating about -0.19 per unit of risk. If you would invest 372,000 in Narae Nanotech Corp on October 16, 2024 and sell it today you would lose (22,000) from holding Narae Nanotech Corp or give up 5.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Narae Nanotech Corp vs. SeAH Besteel Corp
Performance |
| Timeline |
| Narae Nanotech Corp |
| SeAH Besteel Corp |
Narae Nanotech and SeAH Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Narae Nanotech and SeAH Besteel
The main advantage of trading using opposite Narae Nanotech and SeAH Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Narae Nanotech position performs unexpectedly, SeAH Besteel 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 SeAH Besteel will offset losses from the drop in SeAH Besteel's long position.| Narae Nanotech vs. InfoBank | Narae Nanotech vs. BNK Financial Group | Narae Nanotech vs. KB Financial Group | Narae Nanotech vs. Dongbu Insurance Co |
| SeAH Besteel vs. AptaBio Therapeutics | SeAH Besteel vs. Daewoo SBI SPAC | SeAH Besteel vs. Dream Security co | SeAH Besteel 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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