Correlation Between Kbi Metal and NH Investment
Can any of the company-specific risk be diversified away by investing in both Kbi Metal 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 Kbi Metal and NH Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and NH Investment Securities, you can compare the effects of market volatilities on Kbi Metal 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 Kbi Metal with a short position of NH Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and NH Investment.
Diversification Opportunities for Kbi Metal and NH Investment
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kbi and 005940 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co 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 Kbi Metal 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 Kbi Metal 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 Securities has no effect on the direction of Kbi Metal i.e., Kbi Metal and NH Investment go up and down completely randomly.
Pair Corralation between Kbi Metal and NH Investment
Assuming the 90 days trading horizon Kbi Metal Co is expected to generate 3.01 times more return on investment than NH Investment. However, Kbi Metal is 3.01 times more volatile than NH Investment Securities. It trades about 0.29 of its potential returns per unit of risk. NH Investment Securities is currently generating about 0.02 per unit of risk. If you would invest 166,700 in Kbi Metal Co on October 10, 2024 and sell it today you would earn a total of 42,800 from holding Kbi Metal Co or generate 25.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. NH Investment Securities
Performance |
| Timeline |
| Kbi Metal |
| NH Investment Securities |
Kbi Metal and NH Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and NH Investment
The main advantage of trading using opposite Kbi Metal and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal 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.| Kbi Metal vs. Daejung Chemicals Metals | Kbi Metal vs. Hankuk Steel Wire | Kbi Metal vs. Moonbae Steel | Kbi Metal vs. Dongbang Transport Logistics |
| NH Investment vs. Ilji Technology Co | NH Investment vs. Daou Technology | NH Investment vs. Hwangkum Steel Technology | NH Investment vs. ENF Technology 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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