Correlation Between Hurum and Nasmedia
Can any of the company-specific risk be diversified away by investing in both Hurum and Nasmedia 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 Hurum and Nasmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Nasmedia Co, you can compare the effects of market volatilities on Hurum and Nasmedia 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 Hurum with a short position of Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Nasmedia.
Diversification Opportunities for Hurum and Nasmedia
Very poor diversification
The 3 months correlation between Hurum and Nasmedia is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia and Hurum 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 Hurum Co are associated (or correlated) with Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of Hurum i.e., Hurum and Nasmedia go up and down completely randomly.
Pair Corralation between Hurum and Nasmedia
Assuming the 90 days trading horizon Hurum Co is expected to under-perform the Nasmedia. In addition to that, Hurum is 1.4 times more volatile than Nasmedia Co. It trades about -0.12 of its total potential returns per unit of risk. Nasmedia Co is currently generating about -0.06 per unit of volatility. If you would invest 1,681,680 in Nasmedia Co on October 13, 2024 and sell it today you would lose (274,680) from holding Nasmedia Co or give up 16.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. Nasmedia Co
Performance |
| Timeline |
| Hurum |
| Nasmedia |
Hurum and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Nasmedia
The main advantage of trading using opposite Hurum and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia's long position.| Hurum vs. Handok Clean Tech | Hurum vs. TOPMATERIAL LTD | Hurum vs. Polaris Office Corp | Hurum vs. RF Materials Co |
| Nasmedia vs. Xavis Co | Nasmedia vs. Hurum Co | Nasmedia vs. Daishin Balance No8 | Nasmedia vs. Korea Real Estate |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |