Correlation Between NH Investment and Digital Imaging
Can any of the company-specific risk be diversified away by investing in both NH Investment and Digital Imaging 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 Digital Imaging 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 Digital Imaging Technology, you can compare the effects of market volatilities on NH Investment and Digital Imaging 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 Digital Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Digital Imaging.
Diversification Opportunities for NH Investment and Digital Imaging
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 005940 and Digital is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Digital Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Imaging Tech 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 Digital Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Imaging Tech has no effect on the direction of NH Investment i.e., NH Investment and Digital Imaging go up and down completely randomly.
Pair Corralation between NH Investment and Digital Imaging
Assuming the 90 days trading horizon NH Investment Securities is expected to under-perform the Digital Imaging. But the stock apears to be less risky and, when comparing its historical volatility, NH Investment Securities is 2.1 times less risky than Digital Imaging. The stock trades about -0.1 of its potential returns per unit of risk. The Digital Imaging Technology is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,275,000 in Digital Imaging Technology on October 16, 2024 and sell it today you would earn a total of 175,000 from holding Digital Imaging Technology or generate 13.73% 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. Digital Imaging Technology
Performance |
| Timeline |
| NH Investment Securities |
| Digital Imaging Tech |
NH Investment and Digital Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and Digital Imaging
The main advantage of trading using opposite NH Investment and Digital Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Digital Imaging 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 Digital Imaging will offset losses from the drop in Digital Imaging's long position.| NH Investment vs. Yura Tech Co | NH Investment vs. Samlip General Foods | NH Investment vs. Kukil Metal Co | NH Investment vs. Amogreentech Co |
| Digital Imaging vs. NH Investment Securities | Digital Imaging vs. Sempio Foods Co | Digital Imaging vs. Sangsangin Investment Securities | Digital Imaging vs. Woori Technology Investment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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