Correlation Between NH Investment and Ni Steel
Can any of the company-specific risk be diversified away by investing in both NH Investment and Ni Steel 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 Ni Steel 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 Ni Steel, you can compare the effects of market volatilities on NH Investment and Ni Steel 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 Ni Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Ni Steel.
Diversification Opportunities for NH Investment and Ni Steel
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 005940 and 008260 is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Ni Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ni Steel 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 Ni Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ni Steel has no effect on the direction of NH Investment i.e., NH Investment and Ni Steel go up and down completely randomly.
Pair Corralation between NH Investment and Ni Steel
Assuming the 90 days trading horizon NH Investment is expected to generate 1.08 times less return on investment than Ni Steel. But when comparing it to its historical volatility, NH Investment Securities is 1.39 times less risky than Ni Steel. It trades about 0.16 of its potential returns per unit of risk. Ni Steel is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 341,000 in Ni Steel on November 3, 2024 and sell it today you would earn a total of 11,500 from holding Ni Steel or generate 3.37% 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. Ni Steel
Performance |
| Timeline |
| NH Investment Securities |
| Ni Steel |
NH Investment and Ni Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and Ni Steel
The main advantage of trading using opposite NH Investment and Ni Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Ni Steel 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 Ni Steel will offset losses from the drop in Ni Steel's long position.| NH Investment vs. PI Advanced Materials | NH Investment vs. BGF Retail Co | NH Investment vs. Daishin Information Communications | NH Investment vs. Solus Advanced Materials |
| Ni Steel vs. DB Insurance Co | Ni Steel vs. Cuckoo Electronics Co | Ni Steel vs. Jeju Bank | Ni Steel vs. Settlebank |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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