Correlation Between NAU IB and Aju IB
Can any of the company-specific risk be diversified away by investing in both NAU IB and Aju IB 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 NAU IB and Aju IB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAU IB Capital and Aju IB Investment, you can compare the effects of market volatilities on NAU IB and Aju IB 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 NAU IB with a short position of Aju IB. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAU IB and Aju IB.
Diversification Opportunities for NAU IB and Aju IB
Excellent diversification
The 3 months correlation between NAU and Aju is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding NAU IB Capital and Aju IB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aju IB Investment and NAU IB 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 NAU IB Capital are associated (or correlated) with Aju IB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aju IB Investment has no effect on the direction of NAU IB i.e., NAU IB and Aju IB go up and down completely randomly.
Pair Corralation between NAU IB and Aju IB
Assuming the 90 days trading horizon NAU IB Capital is expected to under-perform the Aju IB. But the stock apears to be less risky and, when comparing its historical volatility, NAU IB Capital is 1.29 times less risky than Aju IB. The stock trades about -0.03 of its potential returns per unit of risk. The Aju IB Investment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 234,242 in Aju IB Investment on September 4, 2024 and sell it today you would earn a total of 48,758 from holding Aju IB Investment or generate 20.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAU IB Capital vs. Aju IB Investment
Performance |
| Timeline |
| NAU IB Capital |
| Aju IB Investment |
NAU IB and Aju IB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAU IB and Aju IB
The main advantage of trading using opposite NAU IB and Aju IB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAU IB position performs unexpectedly, Aju IB 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 Aju IB will offset losses from the drop in Aju IB's long position.| NAU IB vs. NH Investment Securities | NAU IB vs. Playgram Co | NAU IB vs. DB Financial Investment | NAU IB vs. Sangsin Energy Display |
| Aju IB vs. Atinum Investment Co | Aju IB vs. SBI Investment KOREA | Aju IB vs. Busan Industrial Co | Aju IB vs. UNISEM 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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