Correlation Between NH Investment and Kumho Ind
Can any of the company-specific risk be diversified away by investing in both NH Investment and Kumho Ind 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 Kumho Ind 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 Kumho Ind, you can compare the effects of market volatilities on NH Investment and Kumho Ind 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 Kumho Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Kumho Ind.
Diversification Opportunities for NH Investment and Kumho Ind
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005940 and Kumho is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Kumho Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Ind 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 Kumho Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Ind has no effect on the direction of NH Investment i.e., NH Investment and Kumho Ind go up and down completely randomly.
Pair Corralation between NH Investment and Kumho Ind
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 0.88 times more return on investment than Kumho Ind. However, NH Investment Securities is 1.14 times less risky than Kumho Ind. It trades about 0.1 of its potential returns per unit of risk. Kumho Ind is currently generating about -0.14 per unit of risk. If you would invest 983,854 in NH Investment Securities on September 4, 2024 and sell it today you would earn a total of 398,146 from holding NH Investment Securities or generate 40.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Investment Securities vs. Kumho Ind
Performance |
| Timeline |
| NH Investment Securities |
| Kumho Ind |
NH Investment and Kumho Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and Kumho Ind
The main advantage of trading using opposite NH Investment and Kumho Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Kumho Ind 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 Kumho Ind will offset losses from the drop in Kumho Ind's long position.| NH Investment vs. AptaBio Therapeutics | NH Investment vs. Daewoo SBI SPAC | NH Investment vs. Dream Security co | NH Investment vs. Microfriend |
| Kumho Ind vs. Daekyung Machinery Engineering | Kumho Ind vs. Dongbang Ship Machinery | Kumho Ind vs. WooDeumGee Farm Co, | Kumho Ind vs. Daewoo Engineering Construction |
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 CEOs Directory module to screen CEOs from public companies around the world.
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