Correlation Between Neo Cremar and FoodNamoo
Can any of the company-specific risk be diversified away by investing in both Neo Cremar and FoodNamoo 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 Neo Cremar and FoodNamoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neo Cremar Co and FoodNamoo, you can compare the effects of market volatilities on Neo Cremar and FoodNamoo 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 Neo Cremar with a short position of FoodNamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neo Cremar and FoodNamoo.
Diversification Opportunities for Neo Cremar and FoodNamoo
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Neo and FoodNamoo is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Neo Cremar Co and FoodNamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FoodNamoo and Neo Cremar 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 Neo Cremar Co are associated (or correlated) with FoodNamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FoodNamoo has no effect on the direction of Neo Cremar i.e., Neo Cremar and FoodNamoo go up and down completely randomly.
Pair Corralation between Neo Cremar and FoodNamoo
Assuming the 90 days trading horizon Neo Cremar Co is expected to generate 1.96 times more return on investment than FoodNamoo. However, Neo Cremar is 1.96 times more volatile than FoodNamoo. It trades about 0.1 of its potential returns per unit of risk. FoodNamoo is currently generating about -0.28 per unit of risk. If you would invest 554,000 in Neo Cremar Co on October 23, 2024 and sell it today you would earn a total of 35,000 from holding Neo Cremar Co or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Neo Cremar Co vs. FoodNamoo
Performance |
| Timeline |
| Neo Cremar |
| FoodNamoo |
Neo Cremar and FoodNamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neo Cremar and FoodNamoo
The main advantage of trading using opposite Neo Cremar and FoodNamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neo Cremar position performs unexpectedly, FoodNamoo 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 FoodNamoo will offset losses from the drop in FoodNamoo's long position.| Neo Cremar vs. Korean Reinsurance Co | Neo Cremar vs. Hanjoo Light Metal | Neo Cremar vs. PJ Metal Co | Neo Cremar vs. Daejung Chemicals Metals |
| FoodNamoo vs. Hanjin Transportation Co | FoodNamoo vs. Daejung Chemicals Metals | FoodNamoo vs. Duksan Hi Metal | FoodNamoo vs. Kukil Metal 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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