Correlation Between Korea Refractories and Nh Investment
Can any of the company-specific risk be diversified away by investing in both Korea Refractories 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 Korea Refractories and Nh Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Refractories Co and Nh Investment And, you can compare the effects of market volatilities on Korea Refractories 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 Korea Refractories with a short position of Nh Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Refractories and Nh Investment.
Diversification Opportunities for Korea Refractories and Nh Investment
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and 005945 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Korea Refractories Co and Nh Investment And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nh Investment And and Korea Refractories 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 Korea Refractories Co 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 And has no effect on the direction of Korea Refractories i.e., Korea Refractories and Nh Investment go up and down completely randomly.
Pair Corralation between Korea Refractories and Nh Investment
Assuming the 90 days trading horizon Korea Refractories Co is expected to under-perform the Nh Investment. In addition to that, Korea Refractories is 1.52 times more volatile than Nh Investment And. It trades about -0.01 of its total potential returns per unit of risk. Nh Investment And is currently generating about 0.17 per unit of volatility. If you would invest 1,181,000 in Nh Investment And on September 13, 2024 and sell it today you would earn a total of 52,000 from holding Nh Investment And or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Refractories Co vs. Nh Investment And
Performance |
| Timeline |
| Korea Refractories |
| Nh Investment And |
Korea Refractories and Nh Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Refractories and Nh Investment
The main advantage of trading using opposite Korea Refractories and Nh Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Refractories 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.| Korea Refractories vs. Hanil Iron Steel | Korea Refractories vs. Dong A Steel Technology | Korea Refractories vs. Korea Air Svc | Korea Refractories vs. Dongbang Transport Logistics |
| Nh Investment vs. Hanwha InvestmentSecurities Co | Nh Investment vs. DSC Investment | Nh Investment vs. Solution Advanced Technology | Nh Investment vs. Busan Industrial 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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