Correlation Between FoodNamoo and Daewon Media
Can any of the company-specific risk be diversified away by investing in both FoodNamoo and Daewon Media 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 FoodNamoo and Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FoodNamoo and Daewon Media Co, you can compare the effects of market volatilities on FoodNamoo and Daewon Media 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 FoodNamoo with a short position of Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of FoodNamoo and Daewon Media.
Diversification Opportunities for FoodNamoo and Daewon Media
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FoodNamoo and Daewon is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding FoodNamoo and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media and FoodNamoo 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 FoodNamoo are associated (or correlated) with Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of FoodNamoo i.e., FoodNamoo and Daewon Media go up and down completely randomly.
Pair Corralation between FoodNamoo and Daewon Media
Assuming the 90 days trading horizon FoodNamoo is expected to under-perform the Daewon Media. But the stock apears to be less risky and, when comparing its historical volatility, FoodNamoo is 1.7 times less risky than Daewon Media. The stock trades about -0.33 of its potential returns per unit of risk. The Daewon Media Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 857,000 in Daewon Media Co on November 7, 2024 and sell it today you would earn a total of 20,000 from holding Daewon Media Co or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FoodNamoo vs. Daewon Media Co
Performance |
| Timeline |
| FoodNamoo |
| Daewon Media |
FoodNamoo and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FoodNamoo and Daewon Media
The main advantage of trading using opposite FoodNamoo and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FoodNamoo position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.| FoodNamoo vs. Maeil Dairies Co | FoodNamoo vs. HYUNDAI FEED | FoodNamoo vs. Neo Cremar Co | FoodNamoo vs. Dongwoo Farm To |
| Daewon Media vs. Spolytech Co | Daewon Media vs. Korea Electronic Certification | Daewon Media vs. PH Tech Co | Daewon Media vs. A Tech Solution 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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