Correlation Between NH Investment and Hurum
Can any of the company-specific risk be diversified away by investing in both NH Investment and Hurum 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 Hurum 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 Hurum Co, you can compare the effects of market volatilities on NH Investment and Hurum 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 Hurum. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Investment and Hurum.
Diversification Opportunities for NH Investment and Hurum
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 005940 and Hurum is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding NH Investment Securities and Hurum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurum 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 Hurum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurum has no effect on the direction of NH Investment i.e., NH Investment and Hurum go up and down completely randomly.
Pair Corralation between NH Investment and Hurum
Assuming the 90 days trading horizon NH Investment is expected to generate 126.67 times less return on investment than Hurum. But when comparing it to its historical volatility, NH Investment Securities is 1.44 times less risky than Hurum. It trades about 0.0 of its potential returns per unit of risk. Hurum Co is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 64,700 in Hurum Co on October 10, 2024 and sell it today you would earn a total of 9,200 from holding Hurum Co or generate 14.22% 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. Hurum Co
Performance |
| Timeline |
| NH Investment Securities |
| Hurum |
NH Investment and Hurum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Investment and Hurum
The main advantage of trading using opposite NH Investment and Hurum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Investment position performs unexpectedly, Hurum 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 Hurum will offset losses from the drop in Hurum's long position.| NH Investment vs. Eagon Industrial Co | NH Investment vs. Kbi Metal Co | NH Investment vs. Hyunwoo Industrial Co | NH Investment vs. Myoung Shin Industrial |
| Hurum vs. NH Investment Securities | Hurum vs. Worldex Industry Trading | Hurum vs. Coloray International Investment | Hurum 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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