Correlation Between Anderson Industrial and Nak Sealing
Can any of the company-specific risk be diversified away by investing in both Anderson Industrial and Nak Sealing 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 Anderson Industrial and Nak Sealing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anderson Industrial Corp and Nak Sealing Technologies, you can compare the effects of market volatilities on Anderson Industrial and Nak Sealing 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 Anderson Industrial with a short position of Nak Sealing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anderson Industrial and Nak Sealing.
Diversification Opportunities for Anderson Industrial and Nak Sealing
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anderson and Nak is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Anderson Industrial Corp and Nak Sealing Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nak Sealing Technologies and Anderson Industrial 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 Anderson Industrial Corp are associated (or correlated) with Nak Sealing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nak Sealing Technologies has no effect on the direction of Anderson Industrial i.e., Anderson Industrial and Nak Sealing go up and down completely randomly.
Pair Corralation between Anderson Industrial and Nak Sealing
Assuming the 90 days trading horizon Anderson Industrial Corp is expected to generate 1.95 times more return on investment than Nak Sealing. However, Anderson Industrial is 1.95 times more volatile than Nak Sealing Technologies. It trades about 0.04 of its potential returns per unit of risk. Nak Sealing Technologies is currently generating about 0.01 per unit of risk. If you would invest 1,010 in Anderson Industrial Corp on October 25, 2024 and sell it today you would earn a total of 360.00 from holding Anderson Industrial Corp or generate 35.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anderson Industrial Corp vs. Nak Sealing Technologies
Performance |
| Timeline |
| Anderson Industrial Corp |
| Nak Sealing Technologies |
Anderson Industrial and Nak Sealing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anderson Industrial and Nak Sealing
The main advantage of trading using opposite Anderson Industrial and Nak Sealing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anderson Industrial position performs unexpectedly, Nak Sealing 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 Nak Sealing will offset losses from the drop in Nak Sealing's long position.| Anderson Industrial vs. Awea Mechantronic Co | Anderson Industrial vs. Lee Chi Enterprises | Anderson Industrial vs. Kaulin Mfg | Anderson Industrial vs. Gordon Auto Body |
| Nak Sealing vs. CHC Resources Corp | Nak Sealing vs. Taiwan Secom Co | Nak Sealing vs. Taiwan Shin Kong | Nak Sealing vs. Yulon Finance 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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