Correlation Between Narae Nanotech and Shinil Electronics
Can any of the company-specific risk be diversified away by investing in both Narae Nanotech and Shinil Electronics 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 Shinil Electronics 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 Shinil Electronics Co, you can compare the effects of market volatilities on Narae Nanotech and Shinil Electronics 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 Shinil Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Narae Nanotech and Shinil Electronics.
Diversification Opportunities for Narae Nanotech and Shinil Electronics
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Narae and Shinil is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Narae Nanotech Corp and Shinil Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Electronics 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 Shinil Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Electronics has no effect on the direction of Narae Nanotech i.e., Narae Nanotech and Shinil Electronics go up and down completely randomly.
Pair Corralation between Narae Nanotech and Shinil Electronics
Assuming the 90 days trading horizon Narae Nanotech Corp is expected to under-perform the Shinil Electronics. In addition to that, Narae Nanotech is 2.35 times more volatile than Shinil Electronics Co. It trades about -0.05 of its total potential returns per unit of risk. Shinil Electronics Co is currently generating about -0.06 per unit of volatility. If you would invest 205,839 in Shinil Electronics Co on November 6, 2024 and sell it today you would lose (65,439) from holding Shinil Electronics Co or give up 31.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Narae Nanotech Corp vs. Shinil Electronics Co
Performance |
| Timeline |
| Narae Nanotech Corp |
| Shinil Electronics |
Narae Nanotech and Shinil Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Narae Nanotech and Shinil Electronics
The main advantage of trading using opposite Narae Nanotech and Shinil Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Narae Nanotech position performs unexpectedly, Shinil Electronics 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 Shinil Electronics will offset losses from the drop in Shinil Electronics' long position.| Narae Nanotech vs. Korea Investment Holdings | Narae Nanotech vs. Atinum Investment Co | Narae Nanotech vs. TS Investment Corp | Narae Nanotech vs. Woori Technology Investment |
| Shinil Electronics vs. TS Investment Corp | Shinil Electronics vs. EBEST Investment Securities | Shinil Electronics vs. Digital Power Communications | Shinil Electronics vs. KTB Investment Securities |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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