Correlation Between Nh Investment and Microfriend
Can any of the company-specific risk be diversified away by investing in both Nh Investment and Microfriend 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 Microfriend 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 Microfriend, you can compare the effects of market volatilities on Nh Investment and Microfriend 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 Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nh Investment and Microfriend.
Diversification Opportunities for Nh Investment and Microfriend
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 005945 and Microfriend is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nh Investment And and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend 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 Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of Nh Investment i.e., Nh Investment and Microfriend go up and down completely randomly.
Pair Corralation between Nh Investment and Microfriend
Assuming the 90 days trading horizon Nh Investment is expected to generate 4.72 times less return on investment than Microfriend. But when comparing it to its historical volatility, Nh Investment And is 3.96 times less risky than Microfriend. It trades about 0.05 of its potential returns per unit of risk. Microfriend is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 299,000 in Microfriend on October 15, 2024 and sell it today you would earn a total of 7,000 from holding Microfriend or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nh Investment And vs. Microfriend
Performance |
| Timeline |
| Nh Investment And |
| Microfriend |
Nh Investment and Microfriend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nh Investment and Microfriend
The main advantage of trading using opposite Nh Investment and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nh Investment position performs unexpectedly, Microfriend 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 Microfriend will offset losses from the drop in Microfriend's long position.| Nh Investment vs. LB Investment | Nh Investment vs. BIT Computer Co | Nh Investment vs. EBEST Investment Securities | Nh Investment vs. Inzi Display CoLtd |
| Microfriend vs. Nh Investment And | Microfriend vs. Sungchang Autotech Co | Microfriend vs. Yura Tech Co | Microfriend vs. Eagle Veterinary Technology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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