Correlation Between Next Entertainment and Amogreentech
Can any of the company-specific risk be diversified away by investing in both Next Entertainment and Amogreentech 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 Next Entertainment and Amogreentech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Entertainment World and Amogreentech Co, you can compare the effects of market volatilities on Next Entertainment and Amogreentech 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 Next Entertainment with a short position of Amogreentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Entertainment and Amogreentech.
Diversification Opportunities for Next Entertainment and Amogreentech
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Next and Amogreentech is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Next Entertainment World and Amogreentech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech and Next Entertainment 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 Next Entertainment World are associated (or correlated) with Amogreentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech has no effect on the direction of Next Entertainment i.e., Next Entertainment and Amogreentech go up and down completely randomly.
Pair Corralation between Next Entertainment and Amogreentech
Assuming the 90 days trading horizon Next Entertainment World is expected to under-perform the Amogreentech. But the stock apears to be less risky and, when comparing its historical volatility, Next Entertainment World is 1.15 times less risky than Amogreentech. The stock trades about -0.15 of its potential returns per unit of risk. The Amogreentech Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,113,000 in Amogreentech Co on March 4, 2024 and sell it today you would earn a total of 29,000 from holding Amogreentech Co or generate 2.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Next Entertainment World vs. Amogreentech Co
Performance |
Timeline |
Next Entertainment World |
Amogreentech |
Next Entertainment and Amogreentech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Next Entertainment and Amogreentech
The main advantage of trading using opposite Next Entertainment and Amogreentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Entertainment position performs unexpectedly, Amogreentech 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 Amogreentech will offset losses from the drop in Amogreentech's long position.Next Entertainment vs. Daiyang Metal Co | Next Entertainment vs. Solution Advanced Technology | Next Entertainment vs. Busan Industrial Co | Next Entertainment vs. COWELL FASHION CoLtd |
Amogreentech vs. Sangsin Energy Display | Amogreentech vs. Daiyang Metal Co | Amogreentech vs. Solution Advanced Technology | Amogreentech vs. Busan Industrial Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
CEOs Directory Screen CEOs from public companies around the world | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |