Correlation Between Nh Investment and Dongnam Chemical
Can any of the company-specific risk be diversified away by investing in both Nh Investment and Dongnam 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 Dongnam Chemical 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 Dongnam Chemical Co, you can compare the effects of market volatilities on Nh Investment and Dongnam 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 Dongnam Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nh Investment and Dongnam Chemical.
Diversification Opportunities for Nh Investment and Dongnam Chemical
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 005945 and Dongnam is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nh Investment And and Dongnam Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnam 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 And are associated (or correlated) with Dongnam Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnam Chemical has no effect on the direction of Nh Investment i.e., Nh Investment and Dongnam Chemical go up and down completely randomly.
Pair Corralation between Nh Investment and Dongnam Chemical
Assuming the 90 days trading horizon Nh Investment is expected to generate 1.41 times less return on investment than Dongnam Chemical. But when comparing it to its historical volatility, Nh Investment And is 2.16 times less risky than Dongnam Chemical. It trades about 0.56 of its potential returns per unit of risk. Dongnam Chemical Co is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 3,170,000 in Dongnam Chemical Co on October 29, 2024 and sell it today you would earn a total of 235,000 from holding Dongnam Chemical Co or generate 7.41% 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. Dongnam Chemical Co
Performance |
| Timeline |
| Nh Investment And |
| Dongnam Chemical |
Nh Investment and Dongnam Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nh Investment and Dongnam Chemical
The main advantage of trading using opposite Nh Investment and Dongnam Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nh Investment position performs unexpectedly, Dongnam 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 Dongnam Chemical will offset losses from the drop in Dongnam Chemical's long position.| Nh Investment vs. Shinsegae Food | Nh Investment vs. Alton Sports CoLtd | Nh Investment vs. Playgram Co | Nh Investment vs. Daiyang Metal Co |
| Dongnam Chemical vs. Finebesteel | Dongnam Chemical vs. DataSolution | Dongnam Chemical vs. KT Submarine Telecom | Dongnam Chemical vs. ECSTELECOM 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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