Correlation Between NH Investment and KG Eco
Can any of the company-specific risk be diversified away by investing in both NH Investment and KG Eco 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 KG Eco 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 KG Eco Technology, you can compare the effects of market volatilities on NH Investment and KG Eco 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 KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and KG Eco.
Diversification Opportunities for NH Investment and KG Eco
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005940 and 151860 is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco Technology 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 KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of NH Investment i.e., NH Investment and KG Eco go up and down completely randomly.
Pair Corralation between NH Investment and KG Eco
Assuming the 90 days trading horizon NH Investment Securities is expected to under-perform the KG Eco. But the stock apears to be less risky and, when comparing its historical volatility, NH Investment Securities is 2.84 times less risky than KG Eco. The stock trades about -0.11 of its potential returns per unit of risk. The KG Eco Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 517,000 in KG Eco Technology on August 31, 2024 and sell it today you would earn a total of 15,000 from holding KG Eco Technology or generate 2.9% 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. KG Eco Technology
Performance |
| Timeline |
| NH Investment Securities |
| KG Eco Technology |
NH Investment and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and KG Eco
The main advantage of trading using opposite NH Investment and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco's long position.| NH Investment vs. AptaBio Therapeutics | NH Investment vs. Daewoo SBI SPAC | NH Investment vs. Dream Security co | NH Investment vs. Microfriend |
| KG Eco vs. Busan Industrial Co | KG Eco vs. Busan Ind | KG Eco vs. Mirae Asset Daewoo | KG Eco vs. Finebesteel |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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