Correlation Between NH Investment and SKC
Can any of the company-specific risk be diversified away by investing in both NH Investment and SKC 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 SKC 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 SKC Co, you can compare the effects of market volatilities on NH Investment and SKC 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 SKC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and SKC.
Diversification Opportunities for NH Investment and SKC
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between 005940 and SKC is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and SKC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKC Co 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 SKC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKC Co has no effect on the direction of NH Investment i.e., NH Investment and SKC go up and down completely randomly.
Pair Corralation between NH Investment and SKC
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 0.41 times more return on investment than SKC. However, NH Investment Securities is 2.45 times less risky than SKC. It trades about 0.09 of its potential returns per unit of risk. SKC Co is currently generating about 0.02 per unit of risk. If you would invest 826,015 in NH Investment Securities on September 5, 2024 and sell it today you would earn a total of 626,985 from holding NH Investment Securities or generate 75.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Investment Securities vs. SKC Co
Performance |
| Timeline |
| NH Investment Securities |
| SKC Co |
NH Investment and SKC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and SKC
The main advantage of trading using opposite NH Investment and SKC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, SKC 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 SKC will offset losses from the drop in SKC's long position.| NH Investment vs. AptaBio Therapeutics | NH Investment vs. Daewoo SBI SPAC | NH Investment vs. Dream Security co | NH Investment 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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