Correlation Between Nable Communications and KyungIn Electronics
Can any of the company-specific risk be diversified away by investing in both Nable Communications and KyungIn Electronics 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 KyungIn Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and KyungIn Electronics Co, you can compare the effects of market volatilities on Nable Communications and KyungIn Electronics 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 KyungIn Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and KyungIn Electronics.
Diversification Opportunities for Nable Communications and KyungIn Electronics
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nable and KyungIn is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and KyungIn Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KyungIn Electronics 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 KyungIn Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KyungIn Electronics has no effect on the direction of Nable Communications i.e., Nable Communications and KyungIn Electronics go up and down completely randomly.
Pair Corralation between Nable Communications and KyungIn Electronics
Assuming the 90 days trading horizon Nable Communications is expected to generate 1.6 times more return on investment than KyungIn Electronics. However, Nable Communications is 1.6 times more volatile than KyungIn Electronics Co. It trades about 0.28 of its potential returns per unit of risk. KyungIn Electronics Co is currently generating about -0.17 per unit of risk. If you would invest 641,000 in Nable Communications on November 27, 2024 and sell it today you would earn a total of 51,000 from holding Nable Communications or generate 7.96% 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. KyungIn Electronics Co
Performance |
| Timeline |
| Nable Communications |
| KyungIn Electronics |
Nable Communications and KyungIn Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and KyungIn Electronics
The main advantage of trading using opposite Nable Communications and KyungIn Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications position performs unexpectedly, KyungIn Electronics 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 KyungIn Electronics will offset losses from the drop in KyungIn Electronics' long position.| Nable Communications vs. Union Materials Corp | Nable Communications vs. Hannong Chemicals | Nable Communications vs. LG Household Healthcare | Nable Communications vs. Hyosung Advanced Materials |
| KyungIn Electronics vs. Innowireless Co | KyungIn Electronics vs. ITM Semiconductor Co | KyungIn Electronics vs. Mgame Corp | KyungIn Electronics vs. Daishin Information Communications |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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