Correlation Between Nable Communications and Shinsegae Food
Can any of the company-specific risk be diversified away by investing in both Nable Communications and Shinsegae Food 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 Shinsegae Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and Shinsegae Food, you can compare the effects of market volatilities on Nable Communications and Shinsegae Food 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 Shinsegae Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and Shinsegae Food.
Diversification Opportunities for Nable Communications and Shinsegae Food
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nable and Shinsegae is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and Shinsegae Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Food 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 Shinsegae Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Food has no effect on the direction of Nable Communications i.e., Nable Communications and Shinsegae Food go up and down completely randomly.
Pair Corralation between Nable Communications and Shinsegae Food
Assuming the 90 days trading horizon Nable Communications is expected to generate 0.41 times more return on investment than Shinsegae Food. However, Nable Communications is 2.44 times less risky than Shinsegae Food. It trades about 0.04 of its potential returns per unit of risk. Shinsegae Food is currently generating about 0.0 per unit of risk. If you would invest 625,000 in Nable Communications on October 25, 2024 and sell it today you would earn a total of 17,000 from holding Nable Communications or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Nable Communications vs. Shinsegae Food
Performance |
| Timeline |
| Nable Communications |
| Shinsegae Food |
Nable Communications and Shinsegae Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and Shinsegae Food
The main advantage of trading using opposite Nable Communications and Shinsegae Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications position performs unexpectedly, Shinsegae Food 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 Shinsegae Food will offset losses from the drop in Shinsegae Food's long position.| Nable Communications vs. Shinsegae Food | Nable Communications vs. Korea Air Svc | Nable Communications vs. Hanjoo Light Metal | Nable Communications vs. Jin Air Co |
| Shinsegae Food vs. Samsung Electronics Co | Shinsegae Food vs. Samsung Electronics Co | Shinsegae Food vs. KB Financial Group | Shinsegae Food vs. Shinhan Financial Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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