Correlation Between NH Investment and GS Retail
Can any of the company-specific risk be diversified away by investing in both NH Investment and GS Retail 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 Retail 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 Retail Co, you can compare the effects of market volatilities on NH Investment and GS Retail 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 Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and GS Retail.
Diversification Opportunities for NH Investment and GS Retail
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 005940 and 007070 is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail 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 Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of NH Investment i.e., NH Investment and GS Retail go up and down completely randomly.
Pair Corralation between NH Investment and GS Retail
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 1.05 times more return on investment than GS Retail. However, NH Investment is 1.05 times more volatile than GS Retail Co. It trades about 0.22 of its potential returns per unit of risk. GS Retail Co is currently generating about 0.15 per unit of risk. If you would invest 1,444,000 in NH Investment Securities on November 28, 2024 and sell it today you would earn a total of 84,000 from holding NH Investment Securities or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Investment Securities vs. GS Retail Co
Performance |
| Timeline |
| NH Investment Securities |
| GS Retail |
NH Investment and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and GS Retail
The main advantage of trading using opposite NH Investment and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, GS Retail 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 Retail will offset losses from the drop in GS Retail's long position.| NH Investment vs. LG Display Co | NH Investment vs. Nable Communications | NH Investment vs. Display Tech Co | NH Investment vs. Nice Information Telecommunication |
| GS Retail vs. Hanil Chemical Ind | GS Retail vs. Hannong Chemicals | GS Retail vs. Dongnam Chemical Co | GS Retail vs. NewFlex Technology 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 Stocks Directory module to find actively traded stocks across global markets.
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