Correlation Between NH Investment and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both NH Investment and EBEST Investment 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 EBEST Investment 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 EBEST Investment Securities, you can compare the effects of market volatilities on NH Investment and EBEST Investment 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 EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and EBEST Investment.
Diversification Opportunities for NH Investment and EBEST Investment
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005940 and EBEST is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec 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 EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of NH Investment i.e., NH Investment and EBEST Investment go up and down completely randomly.
Pair Corralation between NH Investment and EBEST Investment
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 0.76 times more return on investment than EBEST Investment. However, NH Investment Securities is 1.32 times less risky than EBEST Investment. It trades about 0.08 of its potential returns per unit of risk. EBEST Investment Securities is currently generating about -0.02 per unit of risk. If you would invest 816,471 in NH Investment Securities on August 29, 2024 and sell it today you would earn a total of 516,529 from holding NH Investment Securities or generate 63.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Investment Securities vs. EBEST Investment Securities
Performance |
| Timeline |
| NH Investment Securities |
| EBEST Investment Sec |
NH Investment and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and EBEST Investment
The main advantage of trading using opposite NH Investment and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, EBEST Investment 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| NH Investment vs. LG Display Co | NH Investment vs. Nasmedia Co | NH Investment vs. PlayD Co | NH Investment vs. KIWI Media Group |
| EBEST Investment vs. DB Insurance Co | EBEST Investment vs. KakaoBank Corp | EBEST Investment vs. Pyung Hwa Industrial | EBEST Investment vs. Daiyang Metal 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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