Correlation Between NH Investment and KEPCO Engineering
Can any of the company-specific risk be diversified away by investing in both NH Investment and KEPCO Engineering 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 KEPCO Engineering 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 KEPCO Engineering Construction, you can compare the effects of market volatilities on NH Investment and KEPCO Engineering 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 KEPCO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and KEPCO Engineering.
Diversification Opportunities for NH Investment and KEPCO Engineering
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 005940 and KEPCO is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and KEPCO Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEPCO Engineering 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 KEPCO Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEPCO Engineering has no effect on the direction of NH Investment i.e., NH Investment and KEPCO Engineering go up and down completely randomly.
Pair Corralation between NH Investment and KEPCO Engineering
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 0.46 times more return on investment than KEPCO Engineering. However, NH Investment Securities is 2.16 times less risky than KEPCO Engineering. It trades about 0.11 of its potential returns per unit of risk. KEPCO Engineering Construction is currently generating about -0.02 per unit of risk. If you would invest 1,333,000 in NH Investment Securities on October 27, 2024 and sell it today you would earn a total of 94,000 from holding NH Investment Securities or generate 7.05% 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. KEPCO Engineering Construction
Performance |
| Timeline |
| NH Investment Securities |
| KEPCO Engineering |
NH Investment and KEPCO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and KEPCO Engineering
The main advantage of trading using opposite NH Investment and KEPCO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, KEPCO Engineering 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 KEPCO Engineering will offset losses from the drop in KEPCO Engineering's long position.| NH Investment vs. KB Financial Group | NH Investment vs. Shinhan Financial Group | NH Investment vs. Hana Financial | NH Investment vs. Woori Financial Group |
| KEPCO Engineering vs. A Tech Solution Co | KEPCO Engineering vs. PLAYWITH | KEPCO Engineering vs. Display Tech Co | KEPCO Engineering vs. PlayD 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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