Correlation Between Nable Communications and Kumho Industrial
Can any of the company-specific risk be diversified away by investing in both Nable Communications and Kumho 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 Nable Communications and Kumho Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and Kumho Industrial Co, you can compare the effects of market volatilities on Nable Communications and Kumho 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 Nable Communications with a short position of Kumho Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and Kumho Industrial.
Diversification Opportunities for Nable Communications and Kumho Industrial
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nable and Kumho is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and Kumho Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Industrial 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 Kumho Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Industrial has no effect on the direction of Nable Communications i.e., Nable Communications and Kumho Industrial go up and down completely randomly.
Pair Corralation between Nable Communications and Kumho Industrial
Assuming the 90 days trading horizon Nable Communications is expected to generate 1.94 times less return on investment than Kumho Industrial. But when comparing it to its historical volatility, Nable Communications is 2.48 times less risky than Kumho Industrial. It trades about 0.07 of its potential returns per unit of risk. Kumho Industrial Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 283,000 in Kumho Industrial Co on September 2, 2024 and sell it today you would earn a total of 8,000 from holding Kumho Industrial Co or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nable Communications vs. Kumho Industrial Co
Performance |
| Timeline |
| Nable Communications |
| Kumho Industrial |
Nable Communications and Kumho Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and Kumho Industrial
The main advantage of trading using opposite Nable Communications and Kumho Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications position performs unexpectedly, Kumho 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 Kumho Industrial will offset losses from the drop in Kumho Industrial's long position.| Nable Communications vs. Ilji Technology Co | Nable Communications vs. NewFlex Technology Co | Nable Communications vs. Puloon Technology | Nable Communications vs. Koh Young Technology |
| Kumho Industrial vs. AptaBio Therapeutics | Kumho Industrial vs. Daewoo SBI SPAC | Kumho Industrial vs. Dream Security co | Kumho Industrial 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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