Correlation Between Foodnamoo and KB No4
Can any of the company-specific risk be diversified away by investing in both Foodnamoo and KB No4 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 KB No4 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foodnamoo and KB No4 SPAC, you can compare the effects of market volatilities on Foodnamoo and KB No4 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 KB No4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foodnamoo and KB No4.
Diversification Opportunities for Foodnamoo and KB No4
Pay attention - limited upside
The 3 months correlation between Foodnamoo and 205500 is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Foodnamoo and KB No4 SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB No4 SPAC 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 KB No4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB No4 SPAC has no effect on the direction of Foodnamoo i.e., Foodnamoo and KB No4 go up and down completely randomly.
Pair Corralation between Foodnamoo and KB No4
Assuming the 90 days trading horizon Foodnamoo is expected to under-perform the KB No4. But the stock apears to be less risky and, when comparing its historical volatility, Foodnamoo is 2.76 times less risky than KB No4. The stock trades about -0.25 of its potential returns per unit of risk. The KB No4 SPAC is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 322,000 in KB No4 SPAC on November 3, 2024 and sell it today you would earn a total of 92,000 from holding KB No4 SPAC or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foodnamoo vs. KB No4 SPAC
Performance |
| Timeline |
| Foodnamoo |
| KB No4 SPAC |
Foodnamoo and KB No4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foodnamoo and KB No4
The main advantage of trading using opposite Foodnamoo and KB No4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foodnamoo position performs unexpectedly, KB No4 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 KB No4 will offset losses from the drop in KB No4's long position.| Foodnamoo vs. Heungkuk Metaltech CoLtd | Foodnamoo vs. Lotte Data Communication | Foodnamoo vs. Kbi Metal Co | Foodnamoo vs. PJ Metal Co |
| KB No4 vs. Kukdong Oil Chemicals | KB No4 vs. SKONEC Entertainment Co | KB No4 vs. DC Media Co | KB No4 vs. Lotte Fine Chemical |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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