Correlation Between Nh Investment and LG Household
Can any of the company-specific risk be diversified away by investing in both Nh Investment and LG Household 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 LG Household 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 LG Household Healthcare, you can compare the effects of market volatilities on Nh Investment and LG Household 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 LG Household. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nh Investment and LG Household.
Diversification Opportunities for Nh Investment and LG Household
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 005945 and 051905 is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nh Investment And and LG Household Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Household Healthcare 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 LG Household. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Household Healthcare has no effect on the direction of Nh Investment i.e., Nh Investment and LG Household go up and down completely randomly.
Pair Corralation between Nh Investment and LG Household
Assuming the 90 days trading horizon Nh Investment And is expected to generate 0.44 times more return on investment than LG Household. However, Nh Investment And is 2.26 times less risky than LG Household. It trades about 0.28 of its potential returns per unit of risk. LG Household Healthcare is currently generating about -0.06 per unit of risk. If you would invest 1,282,000 in Nh Investment And on November 27, 2024 and sell it today you would earn a total of 43,000 from holding Nh Investment And or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nh Investment And vs. LG Household Healthcare
Performance |
| Timeline |
| Nh Investment And |
| LG Household Healthcare |
Nh Investment and LG Household Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nh Investment and LG Household
The main advantage of trading using opposite Nh Investment and LG Household positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nh Investment position performs unexpectedly, LG Household 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 LG Household will offset losses from the drop in LG Household's long position.| Nh Investment vs. YeaRimDang Publishing Co | Nh Investment vs. TJ media Co | Nh Investment vs. DONGKUK TED METAL | Nh Investment vs. Shinhan Inverse Copper |
| LG Household vs. TK Chemical | LG Household vs. FNC Entertainment Co | LG Household vs. Digital Multimedia Technology | LG Household vs. SM 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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