Correlation Between FoodNamoo and Imarketkorea
Can any of the company-specific risk be diversified away by investing in both FoodNamoo and Imarketkorea 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 Imarketkorea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FoodNamoo and Imarketkorea, you can compare the effects of market volatilities on FoodNamoo and Imarketkorea 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 Imarketkorea. Check out your portfolio center. Please also check ongoing floating volatility patterns of FoodNamoo and Imarketkorea.
Diversification Opportunities for FoodNamoo and Imarketkorea
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FoodNamoo and Imarketkorea is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding FoodNamoo and Imarketkorea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imarketkorea 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 Imarketkorea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imarketkorea has no effect on the direction of FoodNamoo i.e., FoodNamoo and Imarketkorea go up and down completely randomly.
Pair Corralation between FoodNamoo and Imarketkorea
Assuming the 90 days trading horizon FoodNamoo is expected to generate 5.88 times more return on investment than Imarketkorea. However, FoodNamoo is 5.88 times more volatile than Imarketkorea. It trades about -0.02 of its potential returns per unit of risk. Imarketkorea is currently generating about -0.18 per unit of risk. If you would invest 323,000 in FoodNamoo on August 27, 2024 and sell it today you would lose (6,500) from holding FoodNamoo or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FoodNamoo vs. Imarketkorea
Performance |
| Timeline |
| FoodNamoo |
| Imarketkorea |
FoodNamoo and Imarketkorea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FoodNamoo and Imarketkorea
The main advantage of trading using opposite FoodNamoo and Imarketkorea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FoodNamoo position performs unexpectedly, Imarketkorea 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 Imarketkorea will offset losses from the drop in Imarketkorea's long position.The idea behind FoodNamoo and Imarketkorea pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Imarketkorea vs. FOODWELL Co | Imarketkorea vs. Ni Steel | Imarketkorea vs. FoodNamoo | Imarketkorea vs. Organic Special Pet |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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