Correlation Between SV Investment and Naver
Can any of the company-specific risk be diversified away by investing in both SV Investment and Naver 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 SV Investment and Naver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SV Investment and Naver, you can compare the effects of market volatilities on SV Investment and Naver 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 SV Investment with a short position of Naver. Check out your portfolio center. Please also check ongoing floating volatility patterns of SV Investment and Naver.
Diversification Opportunities for SV Investment and Naver
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 289080 and Naver is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SV Investment and Naver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naver and SV Investment 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 SV Investment are associated (or correlated) with Naver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naver has no effect on the direction of SV Investment i.e., SV Investment and Naver go up and down completely randomly.
Pair Corralation between SV Investment and Naver
Assuming the 90 days trading horizon SV Investment is expected to generate 0.97 times more return on investment than Naver. However, SV Investment is 1.04 times less risky than Naver. It trades about 0.19 of its potential returns per unit of risk. Naver is currently generating about -0.09 per unit of risk. If you would invest 128,500 in SV Investment on December 6, 2024 and sell it today you would earn a total of 12,000 from holding SV Investment or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SV Investment vs. Naver
Performance |
| Timeline |
| SV Investment |
| Naver |
SV Investment and Naver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SV Investment and Naver
The main advantage of trading using opposite SV Investment and Naver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SV Investment position performs unexpectedly, Naver 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 Naver will offset losses from the drop in Naver's long position.| SV Investment vs. Daol Investment Securities | SV Investment vs. Korea Information Communications | SV Investment vs. Nice Information Telecommunication | SV Investment vs. Kisan Telecom Co |
| Naver vs. Ssangyong Materials Corp | Naver vs. Kolon Plastics | Naver vs. Samick Musical Instruments | Naver vs. Mobileleader CoLtd |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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