Correlation Between FoodNamoo and Korea Information
Can any of the company-specific risk be diversified away by investing in both FoodNamoo and Korea Information 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 FoodNamoo and Korea Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FoodNamoo and Korea Information Communications, you can compare the effects of market volatilities on FoodNamoo and Korea Information 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 FoodNamoo with a short position of Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of FoodNamoo and Korea Information.
Diversification Opportunities for FoodNamoo and Korea Information
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FoodNamoo and Korea is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding FoodNamoo and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information and FoodNamoo 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 FoodNamoo are associated (or correlated) with Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of FoodNamoo i.e., FoodNamoo and Korea Information go up and down completely randomly.
Pair Corralation between FoodNamoo and Korea Information
Assuming the 90 days trading horizon FoodNamoo is expected to under-perform the Korea Information. In addition to that, FoodNamoo is 2.25 times more volatile than Korea Information Communications. It trades about -0.09 of its total potential returns per unit of risk. Korea Information Communications is currently generating about -0.06 per unit of volatility. If you would invest 807,000 in Korea Information Communications on September 25, 2024 and sell it today you would lose (28,000) from holding Korea Information Communications or give up 3.47% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
FoodNamoo vs. Korea Information Communicatio
Performance |
Timeline |
FoodNamoo |
Korea Information |
FoodNamoo and Korea Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FoodNamoo and Korea Information
The main advantage of trading using opposite FoodNamoo and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FoodNamoo position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.FoodNamoo vs. Woori Technology | FoodNamoo vs. Hwangkum Steel Technology | FoodNamoo vs. Daishin Information Communications | FoodNamoo vs. Kisan Telecom Co |
Korea Information vs. Woori Technology Investment | Korea Information vs. FoodNamoo | Korea Information vs. Daelim Trading Co | Korea Information vs. SBI Investment KOREA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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