Correlation Between Green Cross and Namhwa Industrial
Can any of the company-specific risk be diversified away by investing in both Green Cross and Namhwa Industrial 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 Green Cross and Namhwa Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Medical and Namhwa Industrial Co, you can compare the effects of market volatilities on Green Cross and Namhwa Industrial 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 Green Cross with a short position of Namhwa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and Namhwa Industrial.
Diversification Opportunities for Green Cross and Namhwa Industrial
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Green and Namhwa is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Medical and Namhwa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namhwa Industrial and Green Cross 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 Green Cross Medical are associated (or correlated) with Namhwa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namhwa Industrial has no effect on the direction of Green Cross i.e., Green Cross and Namhwa Industrial go up and down completely randomly.
Pair Corralation between Green Cross and Namhwa Industrial
Assuming the 90 days trading horizon Green Cross Medical is expected to generate 2.23 times more return on investment than Namhwa Industrial. However, Green Cross is 2.23 times more volatile than Namhwa Industrial Co. It trades about -0.01 of its potential returns per unit of risk. Namhwa Industrial Co is currently generating about -0.05 per unit of risk. If you would invest 582,000 in Green Cross Medical on August 25, 2024 and sell it today you would lose (210,500) from holding Green Cross Medical or give up 36.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cross Medical vs. Namhwa Industrial Co
Performance |
| Timeline |
| Green Cross Medical |
| Namhwa Industrial |
Green Cross and Namhwa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cross and Namhwa Industrial
The main advantage of trading using opposite Green Cross and Namhwa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross position performs unexpectedly, Namhwa Industrial 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 Namhwa Industrial will offset losses from the drop in Namhwa Industrial's long position.| Green Cross vs. Medy Tox | Green Cross vs. Genexine | Green Cross vs. Busan Industrial Co | Green Cross vs. Busan Ind |
| Namhwa Industrial vs. Hanjinkal | Namhwa Industrial vs. Busan Industrial Co | Namhwa Industrial vs. Busan Ind | Namhwa Industrial vs. Mirae Asset Daewoo |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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