Correlation Between Korea Investment and NH Investment
Can any of the company-specific risk be diversified away by investing in both Korea Investment 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 Investment 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 Investment Holdings and NH Investment Securities, you can compare the effects of market volatilities on Korea Investment 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 Investment with a short position of NH Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and NH Investment.
Diversification Opportunities for Korea Investment and NH Investment
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and 005940 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings 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 Korea Investment 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 Investment Holdings 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 Korea Investment i.e., Korea Investment and NH Investment go up and down completely randomly.
Pair Corralation between Korea Investment and NH Investment
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.74 times more return on investment than NH Investment. However, Korea Investment Holdings is 1.35 times less risky than NH Investment. It trades about 0.08 of its potential returns per unit of risk. NH Investment Securities is currently generating about -0.06 per unit of risk. If you would invest 5,280,000 in Korea Investment Holdings on August 24, 2024 and sell it today you would earn a total of 90,000 from holding Korea Investment Holdings or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Investment Holdings vs. NH Investment Securities
Performance |
| Timeline |
| Korea Investment Holdings |
| NH Investment Securities |
Korea Investment and NH Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and NH Investment
The main advantage of trading using opposite Korea Investment and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment 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 Investment vs. AptaBio Therapeutics | Korea Investment vs. Daewoo SBI SPAC | Korea Investment vs. Dream Security co | Korea Investment vs. Microfriend |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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