Correlation Between NH Investment and Keyang Electric
Can any of the company-specific risk be diversified away by investing in both NH Investment and Keyang Electric 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 Keyang Electric 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 Keyang Electric Machinery, you can compare the effects of market volatilities on NH Investment and Keyang Electric 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 Keyang Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Keyang Electric.
Diversification Opportunities for NH Investment and Keyang Electric
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 005940 and Keyang is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Keyang Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyang Electric Machinery 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 Keyang Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyang Electric Machinery has no effect on the direction of NH Investment i.e., NH Investment and Keyang Electric go up and down completely randomly.
Pair Corralation between NH Investment and Keyang Electric
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 0.31 times more return on investment than Keyang Electric. However, NH Investment Securities is 3.23 times less risky than Keyang Electric. It trades about 0.55 of its potential returns per unit of risk. Keyang Electric Machinery is currently generating about 0.12 per unit of risk. If you would invest 1,347,000 in NH Investment Securities on November 5, 2024 and sell it today you would earn a total of 97,000 from holding NH Investment Securities or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Investment Securities vs. Keyang Electric Machinery
Performance |
| Timeline |
| NH Investment Securities |
| Keyang Electric Machinery |
NH Investment and Keyang Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and Keyang Electric
The main advantage of trading using opposite NH Investment and Keyang Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Keyang Electric 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 Keyang Electric will offset losses from the drop in Keyang Electric's long position.| NH Investment vs. Kisan Telecom Co | NH Investment vs. Eagon Industrial Co | NH Investment vs. Lotte Data Communication | NH Investment vs. Daesung Industrial Co |
| Keyang Electric vs. NOVATECH Co | Keyang Electric vs. Eagon Industrial Co | Keyang Electric vs. T RoboticsCoLtd | Keyang Electric vs. LEENO Industrial |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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