Correlation Between Naver and Fantagio Corp
Can any of the company-specific risk be diversified away by investing in both Naver and Fantagio Corp 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 Naver and Fantagio Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naver and Fantagio Corp, you can compare the effects of market volatilities on Naver and Fantagio Corp 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 Naver with a short position of Fantagio Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naver and Fantagio Corp.
Diversification Opportunities for Naver and Fantagio Corp
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Naver and Fantagio is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Naver and Fantagio Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fantagio Corp and Naver 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 Naver are associated (or correlated) with Fantagio Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fantagio Corp has no effect on the direction of Naver i.e., Naver and Fantagio Corp go up and down completely randomly.
Pair Corralation between Naver and Fantagio Corp
Assuming the 90 days trading horizon Naver is expected to generate 0.88 times more return on investment than Fantagio Corp. However, Naver is 1.14 times less risky than Fantagio Corp. It trades about 0.22 of its potential returns per unit of risk. Fantagio Corp is currently generating about -0.08 per unit of risk. If you would invest 18,970,000 in Naver on September 22, 2024 and sell it today you would earn a total of 2,030,000 from holding Naver or generate 10.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Naver vs. Fantagio Corp
Performance |
Timeline |
Naver |
Fantagio Corp |
Naver and Fantagio Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Naver and Fantagio Corp
The main advantage of trading using opposite Naver and Fantagio Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naver position performs unexpectedly, Fantagio Corp 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 Fantagio Corp will offset losses from the drop in Fantagio Corp's long position.Naver vs. Samsung Electronics Co | Naver vs. Samsung Electronics Co | Naver vs. KB Financial Group | Naver vs. Shinhan Financial Group |
Fantagio Corp vs. Samsung Electronics Co | Fantagio Corp vs. Samsung Electronics Co | Fantagio Corp vs. KB Financial Group | Fantagio Corp vs. Shinhan Financial Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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