Correlation Between Ni Steel and NH Investment
Can any of the company-specific risk be diversified away by investing in both Ni Steel 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 Ni Steel and NH Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ni Steel and NH Investment Securities, you can compare the effects of market volatilities on Ni Steel 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 Ni Steel with a short position of NH Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ni Steel and NH Investment.
Diversification Opportunities for Ni Steel and NH Investment
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 008260 and 005940 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ni Steel 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 Ni Steel 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 Ni Steel 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 Ni Steel i.e., Ni Steel and NH Investment go up and down completely randomly.
Pair Corralation between Ni Steel and NH Investment
Assuming the 90 days trading horizon Ni Steel is expected to under-perform the NH Investment. In addition to that, Ni Steel is 1.53 times more volatile than NH Investment Securities. It trades about -0.02 of its total potential returns per unit of risk. NH Investment Securities is currently generating about 0.07 per unit of volatility. If you would invest 879,109 in NH Investment Securities on August 27, 2024 and sell it today you would earn a total of 460,891 from holding NH Investment Securities or generate 52.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ni Steel vs. NH Investment Securities
Performance |
| Timeline |
| Ni Steel |
| NH Investment Securities |
Ni Steel and NH Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ni Steel and NH Investment
The main advantage of trading using opposite Ni Steel and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ni Steel 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.The idea behind Ni Steel and NH Investment Securities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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