Correlation Between Daewoo SBI and Nasmedia
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Nasmedia 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 Daewoo SBI and Nasmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo SBI SPAC and Nasmedia Co, you can compare the effects of market volatilities on Daewoo SBI and Nasmedia 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 Daewoo SBI with a short position of Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Nasmedia.
Diversification Opportunities for Daewoo SBI and Nasmedia
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daewoo and Nasmedia is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia and Daewoo SBI 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 Daewoo SBI SPAC are associated (or correlated) with Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Nasmedia go up and down completely randomly.
Pair Corralation between Daewoo SBI and Nasmedia
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to under-perform the Nasmedia. In addition to that, Daewoo SBI is 1.15 times more volatile than Nasmedia Co. It trades about -0.3 of its total potential returns per unit of risk. Nasmedia Co is currently generating about -0.17 per unit of volatility. If you would invest 1,536,000 in Nasmedia Co on September 1, 2024 and sell it today you would lose (89,000) from holding Nasmedia Co or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Nasmedia Co
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Nasmedia |
Daewoo SBI and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Nasmedia
The main advantage of trading using opposite Daewoo SBI and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia's long position.| Daewoo SBI vs. Choil Aluminum | Daewoo SBI vs. Cube Entertainment | Daewoo SBI vs. Kbi Metal Co | Daewoo SBI vs. Asiana Airlines |
| Nasmedia vs. Samlip General Foods | Nasmedia vs. Display Tech Co | Nasmedia vs. Iljin Display | Nasmedia vs. FOODWELL 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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