Correlation Between E Investment and Naver

Can any of the company-specific risk be diversified away by investing in both E Investment and Naver 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 E Investment and Naver into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E Investment Development and Naver, you can compare the effects of market volatilities on E Investment and Naver 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 E Investment with a short position of Naver. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Investment and Naver.

Diversification Opportunities for E Investment and Naver

0.0

Correlation Coefficient

E Investment  Naver

Pay attention - limited upside

The 3 months correlation between 093230 and Naver is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding E Investment Development and Naver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naver and E Investment 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 E Investment Development are associated (or correlated) with Naver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naver has no effect on the direction of E Investment i.e., E Investment and Naver go up and down completely randomly.

Pair Corralation between E Investment and Naver

If you would invest  20,150,000  in Naver on October 9, 2024 and sell it today you would earn a total of  700,000  from holding Naver or generate 3.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

E Investment Development  vs.  Naver

E Investment Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E Investment Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, E Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Naver

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Naver are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Naver sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with E Investment and Naver

The main advantage of trading using opposite E Investment and Naver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Investment position performs unexpectedly, Naver 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 Naver will offset losses from the drop in Naver's long position.

The idea behind E Investment Development and Naver pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..