Correlation Between NH Investment and Korea Air
Can any of the company-specific risk be diversified away by investing in both NH Investment and Korea Air 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 Korea Air 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 Korea Air Svc, you can compare the effects of market volatilities on NH Investment and Korea Air 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 Korea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Korea Air.
Diversification Opportunities for NH Investment and Korea Air
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between 005940 and Korea is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Korea Air Svc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Air Svc 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 Korea Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Air Svc has no effect on the direction of NH Investment i.e., NH Investment and Korea Air go up and down completely randomly.
Pair Corralation between NH Investment and Korea Air
Assuming the 90 days trading horizon NH Investment Securities is expected to under-perform the Korea Air. But the stock apears to be less risky and, when comparing its historical volatility, NH Investment Securities is 1.82 times less risky than Korea Air. The stock trades about -0.07 of its potential returns per unit of risk. The Korea Air Svc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,620,000 in Korea Air Svc on August 29, 2024 and sell it today you would earn a total of 80,000 from holding Korea Air Svc or generate 1.42% 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. Korea Air Svc
Performance |
| Timeline |
| NH Investment Securities |
| Korea Air Svc |
NH Investment and Korea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and Korea Air
The main advantage of trading using opposite NH Investment and Korea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Korea Air 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 Air will offset losses from the drop in Korea Air's long position.| NH Investment vs. LG Display Co | NH Investment vs. Nasmedia Co | NH Investment vs. PlayD Co | NH Investment vs. KIWI Media Group |
| Korea Air vs. SBI Investment KOREA | Korea Air vs. Stic Investments | Korea Air vs. E Investment Development | Korea Air vs. NH Investment Securities |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |