Correlation Between Narae Nanotech and Korea Real
Can any of the company-specific risk be diversified away by investing in both Narae Nanotech and Korea Real 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 Korea Real 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 Korea Real Estate, you can compare the effects of market volatilities on Narae Nanotech and Korea Real 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 Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Narae Nanotech and Korea Real.
Diversification Opportunities for Narae Nanotech and Korea Real
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Narae and Korea is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Narae Nanotech Corp and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate 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 Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Narae Nanotech i.e., Narae Nanotech and Korea Real go up and down completely randomly.
Pair Corralation between Narae Nanotech and Korea Real
Assuming the 90 days trading horizon Narae Nanotech Corp is expected to generate 4.23 times more return on investment than Korea Real. However, Narae Nanotech is 4.23 times more volatile than Korea Real Estate. It trades about 0.17 of its potential returns per unit of risk. Korea Real Estate is currently generating about -0.02 per unit of risk. If you would invest 312,500 in Narae Nanotech Corp on October 11, 2024 and sell it today you would earn a total of 49,500 from holding Narae Nanotech Corp or generate 15.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Narae Nanotech Corp vs. Korea Real Estate
Performance |
| Timeline |
| Narae Nanotech Corp |
| Korea Real Estate |
Narae Nanotech and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Narae Nanotech and Korea Real
The main advantage of trading using opposite Narae Nanotech and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Narae Nanotech position performs unexpectedly, Korea Real 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 Korea Real will offset losses from the drop in Korea Real's long position.| Narae Nanotech vs. Lotte Data Communication | Narae Nanotech vs. Samyang Foods Co | Narae Nanotech vs. Wireless Power Amplifier | Narae Nanotech vs. Seoul Electronics Telecom |
| Korea Real vs. V One Tech Co | Korea Real vs. Yura Tech Co | Korea Real vs. Narae Nanotech Corp | Korea Real vs. A Tech Solution 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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