Correlation Between Echomarketing CoLtd and Namyang Dairy
Can any of the company-specific risk be diversified away by investing in both Echomarketing CoLtd and Namyang Dairy 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 Echomarketing CoLtd and Namyang Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echomarketing CoLtd and Namyang Dairy Products, you can compare the effects of market volatilities on Echomarketing CoLtd and Namyang Dairy 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 Echomarketing CoLtd with a short position of Namyang Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echomarketing CoLtd and Namyang Dairy.
Diversification Opportunities for Echomarketing CoLtd and Namyang Dairy
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Echomarketing and Namyang is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Echomarketing CoLtd and Namyang Dairy Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namyang Dairy Products and Echomarketing CoLtd 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 Echomarketing CoLtd are associated (or correlated) with Namyang Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namyang Dairy Products has no effect on the direction of Echomarketing CoLtd i.e., Echomarketing CoLtd and Namyang Dairy go up and down completely randomly.
Pair Corralation between Echomarketing CoLtd and Namyang Dairy
Assuming the 90 days trading horizon Echomarketing CoLtd is expected to under-perform the Namyang Dairy. In addition to that, Echomarketing CoLtd is 1.25 times more volatile than Namyang Dairy Products. It trades about 0.0 of its total potential returns per unit of risk. Namyang Dairy Products is currently generating about 0.11 per unit of volatility. If you would invest 5,540,000 in Namyang Dairy Products on September 20, 2024 and sell it today you would earn a total of 770,000 from holding Namyang Dairy Products or generate 13.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 86.89% |
Values | Daily Returns |
Echomarketing CoLtd vs. Namyang Dairy Products
Performance |
Timeline |
Echomarketing CoLtd |
Namyang Dairy Products |
Echomarketing CoLtd and Namyang Dairy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Echomarketing CoLtd and Namyang Dairy
The main advantage of trading using opposite Echomarketing CoLtd and Namyang Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echomarketing CoLtd position performs unexpectedly, Namyang Dairy 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 Namyang Dairy will offset losses from the drop in Namyang Dairy's long position.Echomarketing CoLtd vs. JYP Entertainment | Echomarketing CoLtd vs. Cube Entertainment | Echomarketing CoLtd vs. FNC Entertainment Co |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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