Correlation Between FoodNamoo and PlayD
Can any of the company-specific risk be diversified away by investing in both FoodNamoo and PlayD 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 PlayD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FoodNamoo and PlayD Co, you can compare the effects of market volatilities on FoodNamoo and PlayD 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 PlayD. Check out your portfolio center. Please also check ongoing floating volatility patterns of FoodNamoo and PlayD.
Diversification Opportunities for FoodNamoo and PlayD
Average diversification
The 3 months correlation between FoodNamoo and PlayD is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding FoodNamoo and PlayD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayD 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 PlayD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayD has no effect on the direction of FoodNamoo i.e., FoodNamoo and PlayD go up and down completely randomly.
Pair Corralation between FoodNamoo and PlayD
Assuming the 90 days trading horizon FoodNamoo is expected to under-perform the PlayD. In addition to that, FoodNamoo is 1.05 times more volatile than PlayD Co. It trades about -0.4 of its total potential returns per unit of risk. PlayD Co is currently generating about -0.23 per unit of volatility. If you would invest 646,000 in PlayD Co on October 13, 2024 and sell it today you would lose (60,000) from holding PlayD Co or give up 9.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
FoodNamoo vs. PlayD Co
Performance |
| Timeline |
| FoodNamoo |
| PlayD |
FoodNamoo and PlayD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FoodNamoo and PlayD
The main advantage of trading using opposite FoodNamoo and PlayD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FoodNamoo position performs unexpectedly, PlayD 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 PlayD will offset losses from the drop in PlayD's long position.| FoodNamoo vs. Heungkuk Metaltech CoLtd | FoodNamoo vs. LG Household Healthcare | FoodNamoo vs. Air Busan Co | FoodNamoo vs. Youngsin Metal Industrial |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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