Correlation Between Nh Investment and Dgb Financial
Can any of the company-specific risk be diversified away by investing in both Nh Investment and Dgb Financial 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 Dgb Financial 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 Dgb Financial, you can compare the effects of market volatilities on Nh Investment and Dgb Financial 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 Dgb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nh Investment and Dgb Financial.
Diversification Opportunities for Nh Investment and Dgb Financial
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 005945 and Dgb is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nh Investment And and Dgb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgb Financial 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 Dgb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dgb Financial has no effect on the direction of Nh Investment i.e., Nh Investment and Dgb Financial go up and down completely randomly.
Pair Corralation between Nh Investment and Dgb Financial
Assuming the 90 days trading horizon Nh Investment is expected to generate 2.77 times less return on investment than Dgb Financial. But when comparing it to its historical volatility, Nh Investment And is 1.51 times less risky than Dgb Financial. It trades about 0.22 of its potential returns per unit of risk. Dgb Financial is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 818,000 in Dgb Financial on September 5, 2024 and sell it today you would earn a total of 96,000 from holding Dgb Financial or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nh Investment And vs. Dgb Financial
Performance |
| Timeline |
| Nh Investment And |
| Dgb Financial |
Nh Investment and Dgb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nh Investment and Dgb Financial
The main advantage of trading using opposite Nh Investment and Dgb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nh Investment position performs unexpectedly, Dgb Financial 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 Dgb Financial will offset losses from the drop in Dgb Financial's long position.| Nh Investment vs. Lotte Energy Materials | Nh Investment vs. Samlip General Foods | Nh Investment vs. Lake Materials Co | Nh Investment vs. Foodnamoo |
| Dgb Financial vs. Dongjin Semichem Co | Dgb Financial vs. AhnLab Inc | Dgb Financial vs. Posco ICT | Dgb Financial vs. CJ ENM |
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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