Correlation Between GS Engineering and NH Investment
Can any of the company-specific risk be diversified away by investing in both GS Engineering and NH Investment 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 GS Engineering and NH Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Engineering Construction and NH Investment Securities, you can compare the effects of market volatilities on GS Engineering and NH Investment 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 GS Engineering with a short position of NH Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Engineering and NH Investment.
Diversification Opportunities for GS Engineering and NH Investment
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 006360 and 005940 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding GS Engineering Construction and NH Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Investment Securities and GS Engineering 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 GS Engineering Construction are associated (or correlated) with NH Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Investment Securities has no effect on the direction of GS Engineering i.e., GS Engineering and NH Investment go up and down completely randomly.
Pair Corralation between GS Engineering and NH Investment
Assuming the 90 days trading horizon GS Engineering Construction is expected to generate 2.2 times more return on investment than NH Investment. However, GS Engineering is 2.2 times more volatile than NH Investment Securities. It trades about 0.21 of its potential returns per unit of risk. NH Investment Securities is currently generating about -0.01 per unit of risk. If you would invest 1,777,000 in GS Engineering Construction on September 1, 2024 and sell it today you would earn a total of 171,000 from holding GS Engineering Construction or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Engineering Construction vs. NH Investment Securities
Performance |
| Timeline |
| GS Engineering Const |
| NH Investment Securities |
GS Engineering and NH Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Engineering and NH Investment
The main advantage of trading using opposite GS Engineering and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Engineering position performs unexpectedly, NH Investment 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 NH Investment will offset losses from the drop in NH Investment's long position.| GS Engineering vs. AptaBio Therapeutics | GS Engineering vs. Daewoo SBI SPAC | GS Engineering vs. Dream Security co | GS Engineering vs. Microfriend |
| NH Investment vs. AptaBio Therapeutics | NH Investment vs. Daewoo SBI SPAC | NH Investment vs. Dream Security co | NH Investment vs. Microfriend |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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