Correlation Between LIG-ES SPAC and Nam Hwa
Can any of the company-specific risk be diversified away by investing in both LIG-ES SPAC and Nam Hwa 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 LIG-ES SPAC and Nam Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIG ES SPAC and Nam Hwa Construction, you can compare the effects of market volatilities on LIG-ES SPAC and Nam Hwa 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 LIG-ES SPAC with a short position of Nam Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIG-ES SPAC and Nam Hwa.
Diversification Opportunities for LIG-ES SPAC and Nam Hwa
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LIG-ES and Nam is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding LIG ES SPAC and Nam Hwa Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Hwa Construction and LIG-ES SPAC 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 LIG ES SPAC are associated (or correlated) with Nam Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Hwa Construction has no effect on the direction of LIG-ES SPAC i.e., LIG-ES SPAC and Nam Hwa go up and down completely randomly.
Pair Corralation between LIG-ES SPAC and Nam Hwa
Assuming the 90 days trading horizon LIG ES SPAC is expected to under-perform the Nam Hwa. But the stock apears to be less risky and, when comparing its historical volatility, LIG ES SPAC is 1.19 times less risky than Nam Hwa. The stock trades about -0.26 of its potential returns per unit of risk. The Nam Hwa Construction is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 452,000 in Nam Hwa Construction on September 13, 2024 and sell it today you would lose (31,000) from holding Nam Hwa Construction or give up 6.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIG ES SPAC vs. Nam Hwa Construction
Performance |
| Timeline |
| LIG ES SPAC |
| Nam Hwa Construction |
LIG-ES SPAC and Nam Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIG-ES SPAC and Nam Hwa
The main advantage of trading using opposite LIG-ES SPAC and Nam Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIG-ES SPAC position performs unexpectedly, Nam Hwa 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 Nam Hwa will offset losses from the drop in Nam Hwa's long position.| LIG-ES SPAC vs. Foodnamoo | LIG-ES SPAC vs. ITM Semiconductor Co | LIG-ES SPAC vs. Sempio Foods Co | LIG-ES SPAC vs. Samyang Foods Co |
| Nam Hwa vs. Korea New Network | Nam Hwa vs. Solution Advanced Technology | Nam Hwa vs. Busan Industrial Co | Nam Hwa vs. Busan Ind |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |