Correlation Between Coremax Corp and Nan Pao
Can any of the company-specific risk be diversified away by investing in both Coremax Corp and Nan Pao 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 Coremax Corp and Nan Pao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coremax Corp and Nan Pao Resins, you can compare the effects of market volatilities on Coremax Corp and Nan Pao 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 Coremax Corp with a short position of Nan Pao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coremax Corp and Nan Pao.
Diversification Opportunities for Coremax Corp and Nan Pao
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coremax and Nan is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Coremax Corp and Nan Pao Resins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Pao Resins and Coremax Corp 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 Coremax Corp are associated (or correlated) with Nan Pao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Pao Resins has no effect on the direction of Coremax Corp i.e., Coremax Corp and Nan Pao go up and down completely randomly.
Pair Corralation between Coremax Corp and Nan Pao
Assuming the 90 days trading horizon Coremax Corp is expected to under-perform the Nan Pao. But the stock apears to be less risky and, when comparing its historical volatility, Coremax Corp is 1.2 times less risky than Nan Pao. The stock trades about -0.05 of its potential returns per unit of risk. The Nan Pao Resins is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13,750 in Nan Pao Resins on November 19, 2024 and sell it today you would earn a total of 20,050 from holding Nan Pao Resins or generate 145.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Coremax Corp vs. Nan Pao Resins
Performance |
| Timeline |
| Coremax Corp |
| Nan Pao Resins |
Coremax Corp and Nan Pao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coremax Corp and Nan Pao
The main advantage of trading using opposite Coremax Corp and Nan Pao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coremax Corp position performs unexpectedly, Nan Pao 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 Nan Pao will offset losses from the drop in Nan Pao's long position.| Coremax Corp vs. Mechema Chemicals Int | Coremax Corp vs. China Steel Chemical | Coremax Corp vs. Delta Electronics | Coremax Corp vs. Hota Industrial Mfg |
| Nan Pao vs. Basso Industry Corp | Nan Pao vs. Chung Hsin Electric Machinery | Nan Pao vs. TYC Brother Industrial | Nan Pao vs. TECO Electric Machinery |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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