Correlation Between NH Investment and HB Technology
Can any of the company-specific risk be diversified away by investing in both NH Investment and HB Technology 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 HB Technology 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 HB Technology TD, you can compare the effects of market volatilities on NH Investment and HB Technology 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 HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and HB Technology.
Diversification Opportunities for NH Investment and HB Technology
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 005940 and 078150 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD 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 HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of NH Investment i.e., NH Investment and HB Technology go up and down completely randomly.
Pair Corralation between NH Investment and HB Technology
Assuming the 90 days trading horizon NH Investment is expected to generate 2.96 times less return on investment than HB Technology. But when comparing it to its historical volatility, NH Investment Securities is 5.37 times less risky than HB Technology. It trades about 0.24 of its potential returns per unit of risk. HB Technology TD is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 238,000 in HB Technology TD on November 8, 2024 and sell it today you would earn a total of 25,500 from holding HB Technology TD or generate 10.71% 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. HB Technology TD
Performance |
| Timeline |
| NH Investment Securities |
| HB Technology TD |
NH Investment and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and HB Technology
The main advantage of trading using opposite NH Investment and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| NH Investment vs. INFINITT Healthcare Co | NH Investment vs. Hyunwoo Industrial Co | NH Investment vs. Songwon Industrial Co | NH Investment vs. Korea Industrial Co |
| HB Technology vs. Sangsin Energy Display | HB Technology vs. Playgram Co | HB Technology vs. Shinhan Inverse Silver | HB Technology vs. Daishin Information Communications |
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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