Correlation Between NH Investment and Eugene Investment
Can any of the company-specific risk be diversified away by investing in both NH Investment and Eugene Investment 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 NH Investment and Eugene Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Investment Securities and Eugene Investment Securities, you can compare the effects of market volatilities on NH Investment and Eugene Investment 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 NH Investment with a short position of Eugene Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Eugene Investment.
Diversification Opportunities for NH Investment and Eugene Investment
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 005940 and Eugene is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Eugene Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eugene Investment and NH 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 NH Investment Securities are associated (or correlated) with Eugene Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eugene Investment has no effect on the direction of NH Investment i.e., NH Investment and Eugene Investment go up and down completely randomly.
Pair Corralation between NH Investment and Eugene Investment
Assuming the 90 days trading horizon NH Investment is expected to generate 2.93 times less return on investment than Eugene Investment. But when comparing it to its historical volatility, NH Investment Securities is 1.6 times less risky than Eugene Investment. It trades about 0.17 of its potential returns per unit of risk. Eugene Investment Securities is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 240,500 in Eugene Investment Securities on November 27, 2024 and sell it today you would earn a total of 29,500 from holding Eugene Investment Securities or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Investment Securities vs. Eugene Investment Securities
Performance |
| Timeline |
| NH Investment Securities |
| Eugene Investment |
NH Investment and Eugene Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and Eugene Investment
The main advantage of trading using opposite NH Investment and Eugene Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Eugene Investment 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 Eugene Investment will offset losses from the drop in Eugene Investment's long position.| NH Investment vs. SV Investment | NH Investment vs. Green Cross Medical | NH Investment vs. Daol Investment Securities | NH Investment vs. E Investment Development |
| Eugene Investment vs. Kukdo Chemical Co | Eugene Investment vs. Silicon2 Co | Eugene Investment vs. Hannong Chemicals | Eugene Investment vs. Global Standard Technology |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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