Correlation Between Nable Communications and Air Busan
Can any of the company-specific risk be diversified away by investing in both Nable Communications and Air Busan 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 Air Busan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nable Communications and Air Busan Co, you can compare the effects of market volatilities on Nable Communications and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nable Communications and Air Busan.
Diversification Opportunities for Nable Communications and Air Busan
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nable and Air is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nable Communications and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Nable Communications i.e., Nable Communications and Air Busan go up and down completely randomly.
Pair Corralation between Nable Communications and Air Busan
Assuming the 90 days trading horizon Nable Communications is expected to under-perform the Air Busan. In addition to that, Nable Communications is 1.53 times more volatile than Air Busan Co. It trades about -0.19 of its total potential returns per unit of risk. Air Busan Co is currently generating about -0.16 per unit of volatility. If you would invest 232,500 in Air Busan Co on October 14, 2024 and sell it today you would lose (8,000) from holding Air Busan Co or give up 3.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nable Communications vs. Air Busan Co
Performance |
| Timeline |
| Nable Communications |
| Air Busan |
Nable Communications and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nable Communications and Air Busan
The main advantage of trading using opposite Nable Communications and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nable Communications position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan's long position.| Nable Communications vs. Seohee Construction Co | Nable Communications vs. Seoul Electronics Telecom | Nable Communications vs. Korea Electronic Certification | Nable Communications vs. Cuckoo Electronics Co |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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