Correlation Between Doosan Heavy and NH Investment
Can any of the company-specific risk be diversified away by investing in both Doosan Heavy 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 Doosan Heavy and NH Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doosan Heavy Ind and NH Investment Securities, you can compare the effects of market volatilities on Doosan Heavy 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 Doosan Heavy with a short position of NH Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doosan Heavy and NH Investment.
Diversification Opportunities for Doosan Heavy and NH Investment
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Doosan and 005940 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Doosan Heavy Ind 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 Doosan Heavy 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 Doosan Heavy Ind 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 Doosan Heavy i.e., Doosan Heavy and NH Investment go up and down completely randomly.
Pair Corralation between Doosan Heavy and NH Investment
Assuming the 90 days trading horizon Doosan Heavy is expected to generate 1.31 times less return on investment than NH Investment. In addition to that, Doosan Heavy is 1.94 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 0.05 per unit of volatility. If you would invest 1,222,000 in NH Investment Securities on August 31, 2024 and sell it today you would earn a total of 110,000 from holding NH Investment Securities or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doosan Heavy Ind vs. NH Investment Securities
Performance |
| Timeline |
| Doosan Heavy Ind |
| NH Investment Securities |
Doosan Heavy and NH Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doosan Heavy and NH Investment
The main advantage of trading using opposite Doosan Heavy and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doosan Heavy 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.| Doosan Heavy vs. NH Investment Securities | Doosan Heavy vs. Innowireless Co | Doosan Heavy vs. TS Investment Corp | Doosan Heavy vs. Nice Information Telecommunication |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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