Correlation Between NH Investment and PlayD
Can any of the company-specific risk be diversified away by investing in both NH Investment and PlayD 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 PlayD 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 PlayD Co, you can compare the effects of market volatilities on NH Investment and PlayD 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 PlayD. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and PlayD.
Diversification Opportunities for NH Investment and PlayD
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 005940 and PlayD is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and PlayD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayD 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 PlayD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayD has no effect on the direction of NH Investment i.e., NH Investment and PlayD go up and down completely randomly.
Pair Corralation between NH Investment and PlayD
Assuming the 90 days trading horizon NH Investment Securities is expected to generate 0.3 times more return on investment than PlayD. However, NH Investment Securities is 3.28 times less risky than PlayD. It trades about 0.07 of its potential returns per unit of risk. PlayD Co is currently generating about 0.01 per unit of risk. If you would invest 892,202 in NH Investment Securities on October 18, 2024 and sell it today you would earn a total of 469,798 from holding NH Investment Securities or generate 52.66% 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. PlayD Co
Performance |
| Timeline |
| NH Investment Securities |
| PlayD |
NH Investment and PlayD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and PlayD
The main advantage of trading using opposite NH Investment and PlayD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, PlayD 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 PlayD will offset losses from the drop in PlayD's long position.| NH Investment vs. Woori Financial Group | NH Investment vs. Jeju Bank | NH Investment vs. Incar Financial Service | NH Investment vs. Korean Reinsurance Co |
| PlayD vs. KTB Investment Securities | PlayD vs. Daewon Media Co | PlayD vs. NH Investment Securities | PlayD vs. SKONEC Entertainment 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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