Correlation Between Narae Nanotech and Jeju Semiconductor
Can any of the company-specific risk be diversified away by investing in both Narae Nanotech and Jeju Semiconductor 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 Jeju Semiconductor 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 Jeju Semiconductor Corp, you can compare the effects of market volatilities on Narae Nanotech and Jeju Semiconductor 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 Jeju Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Narae Nanotech and Jeju Semiconductor.
Diversification Opportunities for Narae Nanotech and Jeju Semiconductor
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Narae and Jeju is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Narae Nanotech Corp and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor 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 Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of Narae Nanotech i.e., Narae Nanotech and Jeju Semiconductor go up and down completely randomly.
Pair Corralation between Narae Nanotech and Jeju Semiconductor
Assuming the 90 days trading horizon Narae Nanotech Corp is expected to generate 0.93 times more return on investment than Jeju Semiconductor. However, Narae Nanotech Corp is 1.07 times less risky than Jeju Semiconductor. It trades about 0.58 of its potential returns per unit of risk. Jeju Semiconductor Corp is currently generating about -0.08 per unit of risk. If you would invest 282,000 in Narae Nanotech Corp on September 22, 2024 and sell it today you would earn a total of 135,500 from holding Narae Nanotech Corp or generate 48.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Narae Nanotech Corp vs. Jeju Semiconductor Corp
Performance |
| Timeline |
| Narae Nanotech Corp |
| Jeju Semiconductor Corp |
Narae Nanotech and Jeju Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Narae Nanotech and Jeju Semiconductor
The main advantage of trading using opposite Narae Nanotech and Jeju Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Narae Nanotech position performs unexpectedly, Jeju Semiconductor 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 Jeju Semiconductor will offset losses from the drop in Jeju Semiconductor's long position.| Narae Nanotech vs. Dawonsys CoLtd | Narae Nanotech vs. Elentec Co | Narae Nanotech vs. Robostar CoLtd | Narae Nanotech vs. HyVision System |
| Jeju Semiconductor vs. Sam Yang Foods | Jeju Semiconductor vs. Kisan Telecom Co | Jeju Semiconductor vs. KT Submarine Telecom | Jeju Semiconductor vs. CJ Seafood 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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