Correlation Between FoodNamoo and Kakaopay Corp
Can any of the company-specific risk be diversified away by investing in both FoodNamoo and Kakaopay Corp 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 Kakaopay Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FoodNamoo and kakaopay Corp, you can compare the effects of market volatilities on FoodNamoo and Kakaopay Corp 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 Kakaopay Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of FoodNamoo and Kakaopay Corp.
Diversification Opportunities for FoodNamoo and Kakaopay Corp
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FoodNamoo and Kakaopay is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding FoodNamoo and kakaopay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on kakaopay Corp 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 Kakaopay Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of kakaopay Corp has no effect on the direction of FoodNamoo i.e., FoodNamoo and Kakaopay Corp go up and down completely randomly.
Pair Corralation between FoodNamoo and Kakaopay Corp
Assuming the 90 days trading horizon FoodNamoo is expected to generate 0.7 times more return on investment than Kakaopay Corp. However, FoodNamoo is 1.43 times less risky than Kakaopay Corp. It trades about -0.14 of its potential returns per unit of risk. kakaopay Corp is currently generating about -0.1 per unit of risk. If you would invest 271,000 in FoodNamoo on October 25, 2024 and sell it today you would lose (11,000) from holding FoodNamoo or give up 4.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FoodNamoo vs. kakaopay Corp
Performance |
| Timeline |
| FoodNamoo |
| kakaopay Corp |
FoodNamoo and Kakaopay Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FoodNamoo and Kakaopay Corp
The main advantage of trading using opposite FoodNamoo and Kakaopay Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FoodNamoo position performs unexpectedly, Kakaopay Corp 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 Kakaopay Corp will offset losses from the drop in Kakaopay Corp's long position.| FoodNamoo vs. Maeil Dairies Co | FoodNamoo vs. HYUNDAI FEED | FoodNamoo vs. Neo Cremar Co | FoodNamoo vs. Dongwoo Farm To |
| Kakaopay Corp vs. Korea Refract | Kakaopay Corp vs. Korea Refractories Co | Kakaopay Corp vs. Shinhan Inverse WTI | Kakaopay Corp vs. SAMYOUNG M Tek 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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