Correlation Between Namchow Chemical and EirGenix
Can any of the company-specific risk be diversified away by investing in both Namchow Chemical and EirGenix 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 Namchow Chemical and EirGenix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Namchow Chemical Industrial and EirGenix, you can compare the effects of market volatilities on Namchow Chemical and EirGenix 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 Namchow Chemical with a short position of EirGenix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Namchow Chemical and EirGenix.
Diversification Opportunities for Namchow Chemical and EirGenix
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Namchow and EirGenix is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Namchow Chemical Industrial and EirGenix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EirGenix and Namchow Chemical 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 Namchow Chemical Industrial are associated (or correlated) with EirGenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EirGenix has no effect on the direction of Namchow Chemical i.e., Namchow Chemical and EirGenix go up and down completely randomly.
Pair Corralation between Namchow Chemical and EirGenix
Assuming the 90 days trading horizon Namchow Chemical Industrial is expected to generate 0.6 times more return on investment than EirGenix. However, Namchow Chemical Industrial is 1.66 times less risky than EirGenix. It trades about 0.04 of its potential returns per unit of risk. EirGenix is currently generating about -0.02 per unit of risk. If you would invest 4,490 in Namchow Chemical Industrial on September 5, 2024 and sell it today you would earn a total of 820.00 from holding Namchow Chemical Industrial or generate 18.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Namchow Chemical Industrial vs. EirGenix
Performance |
| Timeline |
| Namchow Chemical Ind |
| EirGenix |
Namchow Chemical and EirGenix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Namchow Chemical and EirGenix
The main advantage of trading using opposite Namchow Chemical and EirGenix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Namchow Chemical position performs unexpectedly, EirGenix 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 EirGenix will offset losses from the drop in EirGenix's long position.| Namchow Chemical vs. Standard Foods Corp | Namchow Chemical vs. TTET Union Corp | Namchow Chemical vs. Uni President Enterprises Corp | Namchow Chemical vs. Charoen Pokphand Enterprise |
| EirGenix vs. Symtek Automation Asia | EirGenix vs. WiseChip Semiconductor | EirGenix vs. Novatek Microelectronics Corp | EirGenix vs. Leader Electronics |
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 CEOs Directory module to screen CEOs from public companies around the world.
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