Correlation Between NH Investment and Miwon Chemical
Can any of the company-specific risk be diversified away by investing in both NH Investment and Miwon Chemical 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 Miwon Chemical 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 Miwon Chemical, you can compare the effects of market volatilities on NH Investment and Miwon Chemical 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 Miwon Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Miwon Chemical.
Diversification Opportunities for NH Investment and Miwon Chemical
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 005940 and Miwon is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Miwon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemical 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 Miwon Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemical has no effect on the direction of NH Investment i.e., NH Investment and Miwon Chemical go up and down completely randomly.
Pair Corralation between NH Investment and Miwon Chemical
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 1.47 times more return on investment than Miwon Chemical. However, NH Investment is 1.47 times more volatile than Miwon Chemical. It trades about 0.07 of its potential returns per unit of risk. Miwon Chemical is currently generating about 0.06 per unit of risk. If you would invest 901,555 in NH Investment Securities on October 30, 2024 and sell it today you would earn a total of 525,445 from holding NH Investment Securities or generate 58.28% 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. Miwon Chemical
Performance |
| Timeline |
| NH Investment Securities |
| Miwon Chemical |
NH Investment and Miwon Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and Miwon Chemical
The main advantage of trading using opposite NH Investment and Miwon Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Miwon Chemical 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 Miwon Chemical will offset losses from the drop in Miwon Chemical's long position.| NH Investment vs. Orbitech Co | NH Investment vs. Formetal Co | NH Investment vs. Yura Tech Co | NH Investment vs. RFTech Co |
| Miwon Chemical vs. Samlip General Foods | Miwon Chemical vs. Sam Yang Foods | Miwon Chemical vs. Sangsangin Investment Securities | Miwon Chemical vs. Pureun Mutual Savings |
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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