Correlation Between NAU IB and SV Investment
Can any of the company-specific risk be diversified away by investing in both NAU IB and SV Investment 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 SV Investment 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 SV Investment, you can compare the effects of market volatilities on NAU IB and SV Investment 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 SV Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAU IB and SV Investment.
Diversification Opportunities for NAU IB and SV Investment
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NAU and 289080 is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NAU IB Capital and SV Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SV 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 SV Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SV Investment has no effect on the direction of NAU IB i.e., NAU IB and SV Investment go up and down completely randomly.
Pair Corralation between NAU IB and SV Investment
Assuming the 90 days trading horizon NAU IB Capital is expected to under-perform the SV Investment. In addition to that, NAU IB is 1.86 times more volatile than SV Investment. It trades about -0.27 of its total potential returns per unit of risk. SV Investment is currently generating about -0.3 per unit of volatility. If you would invest 138,800 in SV Investment on November 7, 2024 and sell it today you would lose (10,300) from holding SV Investment or give up 7.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAU IB Capital vs. SV Investment
Performance |
| Timeline |
| NAU IB Capital |
| SV Investment |
NAU IB and SV Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAU IB and SV Investment
The main advantage of trading using opposite NAU IB and SV Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAU IB position performs unexpectedly, SV Investment 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 SV Investment will offset losses from the drop in SV Investment's long position.| NAU IB vs. Korea Electronic Certification | NAU IB vs. Daol Investment Securities | NAU IB vs. Samyoung Electronics Co | NAU IB vs. PJ Electronics Co |
| SV Investment vs. Samsung Electronics Co | SV Investment vs. Hyundai Engineering Construction | SV Investment vs. Sungmoon Electronics Co | SV Investment vs. Daewoo Engineering Construction |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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