Correlation Between NH SPAC and KG Eco
Can any of the company-specific risk be diversified away by investing in both NH SPAC and KG Eco 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 NH SPAC and KG Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH SPAC 8 and KG Eco Technology, you can compare the effects of market volatilities on NH SPAC and KG Eco 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 NH SPAC with a short position of KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH SPAC and KG Eco.
Diversification Opportunities for NH SPAC and KG Eco
Very poor diversification
The 3 months correlation between 225570 and 151860 is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NH SPAC 8 and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco Technology and NH 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 NH SPAC 8 are associated (or correlated) with KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of NH SPAC i.e., NH SPAC and KG Eco go up and down completely randomly.
Pair Corralation between NH SPAC and KG Eco
Assuming the 90 days trading horizon NH SPAC 8 is expected to under-perform the KG Eco. But the stock apears to be less risky and, when comparing its historical volatility, NH SPAC 8 is 1.9 times less risky than KG Eco. The stock trades about -0.03 of its potential returns per unit of risk. The KG Eco Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 492,000 in KG Eco Technology on September 13, 2024 and sell it today you would lose (2,000) from holding KG Eco Technology or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH SPAC 8 vs. KG Eco Technology
Performance |
| Timeline |
| NH SPAC 8 |
| KG Eco Technology |
NH SPAC and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH SPAC and KG Eco
The main advantage of trading using opposite NH SPAC and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH SPAC position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco's long position.| NH SPAC vs. Shinsegae Information Communication | NH SPAC vs. Lotte Data Communication | NH SPAC vs. MEDIANA CoLtd | NH SPAC vs. ChipsMedia |
| KG Eco vs. Samsung Electronics Co | KG Eco vs. Samsung Electronics Co | KG Eco vs. Naver | KG Eco vs. SK Hynix |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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