Correlation Between Next Entertainment and Synopex
Can any of the company-specific risk be diversified away by investing in both Next Entertainment and Synopex 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 Next Entertainment and Synopex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Entertainment World and Synopex, you can compare the effects of market volatilities on Next Entertainment and Synopex 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 Next Entertainment with a short position of Synopex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Entertainment and Synopex.
Diversification Opportunities for Next Entertainment and Synopex
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Next and Synopex is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Next Entertainment World and Synopex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synopex and Next Entertainment 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 Next Entertainment World are associated (or correlated) with Synopex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synopex has no effect on the direction of Next Entertainment i.e., Next Entertainment and Synopex go up and down completely randomly.
Pair Corralation between Next Entertainment and Synopex
Assuming the 90 days trading horizon Next Entertainment World is expected to under-perform the Synopex. But the stock apears to be less risky and, when comparing its historical volatility, Next Entertainment World is 1.47 times less risky than Synopex. The stock trades about -0.07 of its potential returns per unit of risk. The Synopex is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 243,914 in Synopex on September 13, 2024 and sell it today you would earn a total of 393,086 from holding Synopex or generate 161.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Entertainment World vs. Synopex
Performance |
| Timeline |
| Next Entertainment World |
| Synopex |
Next Entertainment and Synopex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Entertainment and Synopex
The main advantage of trading using opposite Next Entertainment and Synopex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Entertainment position performs unexpectedly, Synopex 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 Synopex will offset losses from the drop in Synopex's long position.| Next Entertainment vs. YG Entertainment | Next Entertainment vs. JYP Entertainment | Next Entertainment vs. Cube Entertainment | Next Entertainment vs. FNC Entertainment Co |
| Synopex vs. ABOV Semiconductor Co | Synopex vs. PJ Metal Co | Synopex vs. Daejung Chemicals Metals | Synopex vs. Hanmi Semiconductor Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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