Correlation Between Narae Nanotech and Finebesteel
Can any of the company-specific risk be diversified away by investing in both Narae Nanotech and Finebesteel 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 Finebesteel 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 Finebesteel, you can compare the effects of market volatilities on Narae Nanotech and Finebesteel 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 Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Narae Nanotech and Finebesteel.
Diversification Opportunities for Narae Nanotech and Finebesteel
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Narae and Finebesteel is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Narae Nanotech Corp and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel 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 Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of Narae Nanotech i.e., Narae Nanotech and Finebesteel go up and down completely randomly.
Pair Corralation between Narae Nanotech and Finebesteel
Assuming the 90 days trading horizon Narae Nanotech Corp is expected to generate 1.22 times more return on investment than Finebesteel. However, Narae Nanotech is 1.22 times more volatile than Finebesteel. It trades about 0.26 of its potential returns per unit of risk. Finebesteel is currently generating about 0.07 per unit of risk. If you would invest 279,000 in Narae Nanotech Corp on September 14, 2024 and sell it today you would earn a total of 54,000 from holding Narae Nanotech Corp or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Narae Nanotech Corp vs. Finebesteel
Performance |
| Timeline |
| Narae Nanotech Corp |
| Finebesteel |
Narae Nanotech and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Narae Nanotech and Finebesteel
The main advantage of trading using opposite Narae Nanotech and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Narae Nanotech position performs unexpectedly, Finebesteel 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 Finebesteel will offset losses from the drop in Finebesteel's long position.| Narae Nanotech vs. HyVision System | Narae Nanotech vs. Daebo Magnetic CoLtd | Narae Nanotech vs. Vitzro Tech Co | Narae Nanotech vs. Solution Advanced Technology |
| Finebesteel vs. Daewon Media Co | Finebesteel vs. Kbi Metal Co | Finebesteel vs. Seoyon Topmetal Co | Finebesteel vs. Kyeryong Construction Industrial |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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