Correlation Between NH Investment and GS Engineering
Can any of the company-specific risk be diversified away by investing in both NH Investment and GS Engineering 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 GS Engineering 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 GS Engineering Construction, you can compare the effects of market volatilities on NH Investment and GS Engineering 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 GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and GS Engineering.
Diversification Opportunities for NH Investment and GS Engineering
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005940 and 006360 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const 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 GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of NH Investment i.e., NH Investment and GS Engineering go up and down completely randomly.
Pair Corralation between NH Investment and GS Engineering
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 0.68 times more return on investment than GS Engineering. However, NH Investment Securities is 1.48 times less risky than GS Engineering. It trades about 0.09 of its potential returns per unit of risk. GS Engineering Construction is currently generating about 0.06 per unit of risk. If you would invest 963,279 in NH Investment Securities on August 29, 2024 and sell it today you would earn a total of 369,721 from holding NH Investment Securities or generate 38.38% 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. GS Engineering Construction
Performance |
| Timeline |
| NH Investment Securities |
| GS Engineering Const |
NH Investment and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and GS Engineering
The main advantage of trading using opposite NH Investment and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering'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 |
| GS Engineering vs. AptaBio Therapeutics | GS Engineering vs. Daewoo SBI SPAC | GS Engineering vs. Dream Security co | GS Engineering vs. Microfriend |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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