Correlation Between NH Investment and Korea Real
Can any of the company-specific risk be diversified away by investing in both NH Investment and Korea Real 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 Korea Real 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 Korea Real Estate, you can compare the effects of market volatilities on NH Investment and Korea Real 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 Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Korea Real.
Diversification Opportunities for NH Investment and Korea Real
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 005940 and Korea is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate 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 Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of NH Investment i.e., NH Investment and Korea Real go up and down completely randomly.
Pair Corralation between NH Investment and Korea Real
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 1.22 times more return on investment than Korea Real. However, NH Investment is 1.22 times more volatile than Korea Real Estate. It trades about -0.1 of its potential returns per unit of risk. Korea Real Estate is currently generating about -0.12 per unit of risk. If you would invest 1,388,000 in NH Investment Securities on October 14, 2024 and sell it today you would lose (37,000) from holding NH Investment Securities or give up 2.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NH Investment Securities vs. Korea Real Estate
Performance |
Timeline |
NH Investment Securities |
Korea Real Estate |
NH Investment and Korea Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NH Investment and Korea Real
The main advantage of trading using opposite NH Investment and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Korea Real 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 Korea Real will offset losses from the drop in Korea Real's long position.NH Investment vs. Seoyon Topmetal Co | NH Investment vs. TS Investment Corp | NH Investment vs. Worldex Industry Trading | NH Investment vs. Handok Clean Tech |
Korea Real vs. Wave Electronics Co | Korea Real vs. NH Investment Securities | Korea Real vs. Seoul Electronics Telecom | Korea Real vs. Samyoung Electronics 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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