Correlation Between N2Tech and SeAH Besteel
Can any of the company-specific risk be diversified away by investing in both N2Tech and SeAH Besteel 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 N2Tech and SeAH Besteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between N2Tech Co and SeAH Besteel Corp, you can compare the effects of market volatilities on N2Tech and SeAH Besteel 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 N2Tech with a short position of SeAH Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of N2Tech and SeAH Besteel.
Diversification Opportunities for N2Tech and SeAH Besteel
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between N2Tech and SeAH is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding N2Tech Co and SeAH Besteel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeAH Besteel Corp and N2Tech 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 N2Tech Co are associated (or correlated) with SeAH Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeAH Besteel Corp has no effect on the direction of N2Tech i.e., N2Tech and SeAH Besteel go up and down completely randomly.
Pair Corralation between N2Tech and SeAH Besteel
Assuming the 90 days trading horizon N2Tech Co is expected to generate 0.88 times more return on investment than SeAH Besteel. However, N2Tech Co is 1.14 times less risky than SeAH Besteel. It trades about -0.1 of its potential returns per unit of risk. SeAH Besteel Corp is currently generating about -0.19 per unit of risk. If you would invest 45,700 in N2Tech Co on October 16, 2024 and sell it today you would lose (1,300) from holding N2Tech Co or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
N2Tech Co vs. SeAH Besteel Corp
Performance |
| Timeline |
| N2Tech |
| SeAH Besteel Corp |
N2Tech and SeAH Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with N2Tech and SeAH Besteel
The main advantage of trading using opposite N2Tech and SeAH Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if N2Tech position performs unexpectedly, SeAH Besteel 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 SeAH Besteel will offset losses from the drop in SeAH Besteel's long position.| N2Tech vs. LG Household Healthcare | N2Tech vs. Daeduck Electronics Co | N2Tech vs. Jeju Beer Co | N2Tech vs. iNtRON Biotechnology |
| SeAH Besteel vs. AptaBio Therapeutics | SeAH Besteel vs. Daewoo SBI SPAC | SeAH Besteel vs. Dream Security co | SeAH Besteel vs. Microfriend |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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