Correlation Between Nh Investment and Oriental Precision
Can any of the company-specific risk be diversified away by investing in both Nh Investment and Oriental Precision 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 Oriental Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nh Investment And and Oriental Precision Engineering, you can compare the effects of market volatilities on Nh Investment and Oriental Precision 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 Oriental Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nh Investment and Oriental Precision.
Diversification Opportunities for Nh Investment and Oriental Precision
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005945 and Oriental is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nh Investment And and Oriental Precision Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Precision 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 And are associated (or correlated) with Oriental Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Precision has no effect on the direction of Nh Investment i.e., Nh Investment and Oriental Precision go up and down completely randomly.
Pair Corralation between Nh Investment and Oriental Precision
Assuming the 90 days trading horizon Nh Investment is expected to generate 17.28 times less return on investment than Oriental Precision. But when comparing it to its historical volatility, Nh Investment And is 4.81 times less risky than Oriental Precision. It trades about 0.06 of its potential returns per unit of risk. Oriental Precision Engineering is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 482,037 in Oriental Precision Engineering on October 16, 2024 and sell it today you would earn a total of 56,963 from holding Oriental Precision Engineering or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nh Investment And vs. Oriental Precision Engineering
Performance |
| Timeline |
| Nh Investment And |
| Oriental Precision |
Nh Investment and Oriental Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nh Investment and Oriental Precision
The main advantage of trading using opposite Nh Investment and Oriental Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nh Investment position performs unexpectedly, Oriental Precision 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 Oriental Precision will offset losses from the drop in Oriental Precision's long position.| Nh Investment vs. Youngsin Metal Industrial | Nh Investment vs. KakaoBank Corp | Nh Investment vs. Woori Financial Group | Nh Investment vs. Daiyang Metal Co |
| Oriental Precision vs. Youngsin Metal Industrial | Oriental Precision vs. Seoyon Topmetal Co | Oriental Precision vs. Kyung In Synthetic Corp | Oriental Precision vs. KPX Green Chemical |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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