Correlation Between Oppein Home and Nanya New

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Can any of the company-specific risk be diversified away by investing in both Oppein Home and Nanya New 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 Oppein Home and Nanya New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppein Home Group and Nanya New Material, you can compare the effects of market volatilities on Oppein Home and Nanya New 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 Oppein Home with a short position of Nanya New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppein Home and Nanya New.

Diversification Opportunities for Oppein Home and Nanya New

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Oppein and Nanya is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Oppein Home Group and Nanya New Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanya New Material and Oppein Home 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 Oppein Home Group are associated (or correlated) with Nanya New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanya New Material has no effect on the direction of Oppein Home i.e., Oppein Home and Nanya New go up and down completely randomly.

Pair Corralation between Oppein Home and Nanya New

Assuming the 90 days trading horizon Oppein Home Group is expected to generate 0.96 times more return on investment than Nanya New. However, Oppein Home Group is 1.04 times less risky than Nanya New. It trades about 0.22 of its potential returns per unit of risk. Nanya New Material is currently generating about 0.08 per unit of risk. If you would invest  4,442  in Oppein Home Group on September 19, 2024 and sell it today you would earn a total of  2,649  from holding Oppein Home Group or generate 59.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Oppein Home Group  vs.  Nanya New Material

 Performance 
       Timeline  
Oppein Home Group 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Oppein Home Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Oppein Home sustained solid returns over the last few months and may actually be approaching a breakup point.
Nanya New Material 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Nanya New Material are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nanya New sustained solid returns over the last few months and may actually be approaching a breakup point.

Oppein Home and Nanya New Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oppein Home and Nanya New

The main advantage of trading using opposite Oppein Home and Nanya New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppein Home position performs unexpectedly, Nanya New 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 Nanya New will offset losses from the drop in Nanya New's long position.
The idea behind Oppein Home Group and Nanya New Material 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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