Correlation Between Newtree CoLtd and Foodnamoo
Can any of the company-specific risk be diversified away by investing in both Newtree CoLtd and Foodnamoo 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 Newtree CoLtd and Foodnamoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newtree CoLtd and Foodnamoo, you can compare the effects of market volatilities on Newtree CoLtd and Foodnamoo 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 Newtree CoLtd with a short position of Foodnamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newtree CoLtd and Foodnamoo.
Diversification Opportunities for Newtree CoLtd and Foodnamoo
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Newtree and Foodnamoo is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Newtree CoLtd and Foodnamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodnamoo and Newtree CoLtd 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 Newtree CoLtd are associated (or correlated) with Foodnamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodnamoo has no effect on the direction of Newtree CoLtd i.e., Newtree CoLtd and Foodnamoo go up and down completely randomly.
Pair Corralation between Newtree CoLtd and Foodnamoo
Assuming the 90 days trading horizon Newtree CoLtd is expected to generate 1.05 times more return on investment than Foodnamoo. However, Newtree CoLtd is 1.05 times more volatile than Foodnamoo. It trades about 0.13 of its potential returns per unit of risk. Foodnamoo is currently generating about 0.14 per unit of risk. If you would invest 558,000 in Newtree CoLtd on November 28, 2024 and sell it today you would earn a total of 32,000 from holding Newtree CoLtd or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Newtree CoLtd vs. Foodnamoo
Performance |
| Timeline |
| Newtree CoLtd |
| Foodnamoo |
Newtree CoLtd and Foodnamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newtree CoLtd and Foodnamoo
The main advantage of trading using opposite Newtree CoLtd and Foodnamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newtree CoLtd position performs unexpectedly, Foodnamoo 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 Foodnamoo will offset losses from the drop in Foodnamoo's long position.| Newtree CoLtd vs. Iljin Materials Co | Newtree CoLtd vs. Daejoo Electronic Materials | Newtree CoLtd vs. Hyundai Engineering Plastics | Newtree CoLtd vs. Ecoplastic |
| Foodnamoo vs. SBI Investment KOREA | Foodnamoo vs. BGF Retail Co | Foodnamoo vs. PJ Metal Co | Foodnamoo vs. Formetal 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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