Correlation Between Nable Communications and Samick Musical
Can any of the company-specific risk be diversified away by investing in both Nable Communications and Samick Musical 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 Nable Communications and Samick Musical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and Samick Musical Instruments, you can compare the effects of market volatilities on Nable Communications and Samick Musical 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 Nable Communications with a short position of Samick Musical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and Samick Musical.
Diversification Opportunities for Nable Communications and Samick Musical
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nable and Samick is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and Samick Musical Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samick Musical Instr and Nable Communications 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 Nable Communications are associated (or correlated) with Samick Musical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samick Musical Instr has no effect on the direction of Nable Communications i.e., Nable Communications and Samick Musical go up and down completely randomly.
Pair Corralation between Nable Communications and Samick Musical
Assuming the 90 days trading horizon Nable Communications is expected to generate 1.85 times more return on investment than Samick Musical. However, Nable Communications is 1.85 times more volatile than Samick Musical Instruments. It trades about 0.06 of its potential returns per unit of risk. Samick Musical Instruments is currently generating about 0.09 per unit of risk. If you would invest 640,000 in Nable Communications on September 1, 2024 and sell it today you would earn a total of 10,000 from holding Nable Communications or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nable Communications vs. Samick Musical Instruments
Performance |
| Timeline |
| Nable Communications |
| Samick Musical Instr |
Nable Communications and Samick Musical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and Samick Musical
The main advantage of trading using opposite Nable Communications and Samick Musical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications position performs unexpectedly, Samick Musical 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 Samick Musical will offset losses from the drop in Samick Musical's long position.| Nable Communications vs. Lotte Non Life Insurance | Nable Communications vs. Korean Reinsurance Co | Nable Communications vs. Korea Information Communications | Nable Communications vs. DB Insurance Co |
| Samick Musical vs. AptaBio Therapeutics | Samick Musical vs. Daewoo SBI SPAC | Samick Musical vs. Dream Security co | Samick Musical vs. Microfriend |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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