Correlation Between Foodnamoo and PLAYWITH
Can any of the company-specific risk be diversified away by investing in both Foodnamoo and PLAYWITH 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 PLAYWITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foodnamoo and PLAYWITH, you can compare the effects of market volatilities on Foodnamoo and PLAYWITH 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 PLAYWITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foodnamoo and PLAYWITH.
Diversification Opportunities for Foodnamoo and PLAYWITH
Poor diversification
The 3 months correlation between Foodnamoo and PLAYWITH is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Foodnamoo and PLAYWITH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYWITH 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 PLAYWITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYWITH has no effect on the direction of Foodnamoo i.e., Foodnamoo and PLAYWITH go up and down completely randomly.
Pair Corralation between Foodnamoo and PLAYWITH
Assuming the 90 days trading horizon Foodnamoo is expected to generate 1.0 times more return on investment than PLAYWITH. However, Foodnamoo is 1.0 times more volatile than PLAYWITH. It trades about -0.05 of its potential returns per unit of risk. PLAYWITH is currently generating about -0.26 per unit of risk. If you would invest 336,500 in Foodnamoo on October 18, 2024 and sell it today you would lose (65,000) from holding Foodnamoo or give up 19.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foodnamoo vs. PLAYWITH
Performance |
| Timeline |
| Foodnamoo |
| PLAYWITH |
Foodnamoo and PLAYWITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foodnamoo and PLAYWITH
The main advantage of trading using opposite Foodnamoo and PLAYWITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foodnamoo position performs unexpectedly, PLAYWITH 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 PLAYWITH will offset losses from the drop in PLAYWITH's long position.| Foodnamoo vs. Infinitt Healthcare Co | Foodnamoo vs. J Steel Co | Foodnamoo vs. Wonil Special Steel | Foodnamoo vs. INSUN Environmental New |
| PLAYWITH vs. Sam Yang Foods | PLAYWITH vs. Foodnamoo | PLAYWITH vs. Daehan Steel | PLAYWITH vs. Samhyun Steel 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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