Correlation Between NH Investment and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both NH Investment and Kbi Metal 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 Kbi Metal 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 Kbi Metal Co, you can compare the effects of market volatilities on NH Investment and Kbi Metal 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 Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Kbi Metal.
Diversification Opportunities for NH Investment and Kbi Metal
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between 005940 and Kbi is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal 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 Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of NH Investment i.e., NH Investment and Kbi Metal go up and down completely randomly.
Pair Corralation between NH Investment and Kbi Metal
Assuming the 90 days trading horizon NH Investment is expected to generate 2.37 times less return on investment than Kbi Metal. But when comparing it to its historical volatility, NH Investment Securities is 3.62 times less risky than Kbi Metal. It trades about 0.09 of its potential returns per unit of risk. Kbi Metal Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 137,900 in Kbi Metal Co on November 3, 2024 and sell it today you would earn a total of 78,600 from holding Kbi Metal Co or generate 57.0% 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. Kbi Metal Co
Performance |
| Timeline |
| NH Investment Securities |
| Kbi Metal |
NH Investment and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and Kbi Metal
The main advantage of trading using opposite NH Investment and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal'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 |
| Kbi Metal vs. Namhwa Industrial Co | Kbi Metal vs. PJ Metal Co | Kbi Metal vs. Seoul Food Industrial | Kbi Metal vs. SCI Information Service |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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