Correlation Between Seoul Electronics and Nh Investment
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics 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 Seoul Electronics and Nh Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Electronics Telecom and Nh Investment And, you can compare the effects of market volatilities on Seoul Electronics 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 Seoul Electronics with a short position of Nh Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and Nh Investment.
Diversification Opportunities for Seoul Electronics and Nh Investment
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seoul and 005945 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom 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 Seoul Electronics 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 Seoul Electronics Telecom 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 Seoul Electronics i.e., Seoul Electronics and Nh Investment go up and down completely randomly.
Pair Corralation between Seoul Electronics and Nh Investment
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to under-perform the Nh Investment. In addition to that, Seoul Electronics is 4.36 times more volatile than Nh Investment And. It trades about -0.08 of its total potential returns per unit of risk. Nh Investment And is currently generating about 0.09 per unit of volatility. If you would invest 1,112,000 in Nh Investment And on August 31, 2024 and sell it today you would earn a total of 96,000 from holding Nh Investment And or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Electronics Telecom vs. Nh Investment And
Performance |
| Timeline |
| Seoul Electronics Telecom |
| Nh Investment And |
Seoul Electronics and Nh Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and Nh Investment
The main advantage of trading using opposite Seoul Electronics and Nh Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics 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.| Seoul Electronics vs. Korea New Network | Seoul Electronics vs. ICD Co | Seoul Electronics vs. DYPNF CoLtd | Seoul Electronics vs. Busan Industrial Co |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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