Correlation Between Narae Nanotech and Hyundai
Can any of the company-specific risk be diversified away by investing in both Narae Nanotech and Hyundai 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 Hyundai 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 Hyundai Motor Co, you can compare the effects of market volatilities on Narae Nanotech and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Narae Nanotech and Hyundai.
Diversification Opportunities for Narae Nanotech and Hyundai
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Narae and Hyundai is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Narae Nanotech Corp and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Narae Nanotech i.e., Narae Nanotech and Hyundai go up and down completely randomly.
Pair Corralation between Narae Nanotech and Hyundai
Assuming the 90 days trading horizon Narae Nanotech Corp is expected to generate 3.52 times more return on investment than Hyundai. However, Narae Nanotech is 3.52 times more volatile than Hyundai Motor Co. It trades about 0.07 of its potential returns per unit of risk. Hyundai Motor Co is currently generating about 0.13 per unit of risk. If you would invest 344,500 in Narae Nanotech Corp on October 14, 2024 and sell it today you would earn a total of 15,500 from holding Narae Nanotech Corp or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Narae Nanotech Corp vs. Hyundai Motor Co
Performance |
| Timeline |
| Narae Nanotech Corp |
| Hyundai Motor |
Narae Nanotech and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Narae Nanotech and Hyundai
The main advantage of trading using opposite Narae Nanotech and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Narae Nanotech position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| Narae Nanotech vs. Infinitt Healthcare Co | Narae Nanotech vs. CKH Food Health | Narae Nanotech vs. CU Medical Systems | Narae Nanotech vs. ABCO Electronics Co |
| Hyundai vs. Green Cross Medical | Hyundai vs. Raontech | Hyundai vs. Sewoon Medical Co | Hyundai vs. Narae Nanotech Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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