Correlation Between Lion Chemtech and NH Investment
Can any of the company-specific risk be diversified away by investing in both Lion Chemtech 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 Lion Chemtech and NH Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Chemtech Co and NH Investment Securities, you can compare the effects of market volatilities on Lion Chemtech 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 Lion Chemtech with a short position of NH Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Chemtech and NH Investment.
Diversification Opportunities for Lion Chemtech and NH Investment
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lion and 005940 is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lion Chemtech 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 Lion Chemtech 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 Lion Chemtech 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 Lion Chemtech i.e., Lion Chemtech and NH Investment go up and down completely randomly.
Pair Corralation between Lion Chemtech and NH Investment
Assuming the 90 days trading horizon Lion Chemtech Co is expected to under-perform the NH Investment. In addition to that, Lion Chemtech is 2.04 times more volatile than NH Investment Securities. It trades about -0.15 of its total potential returns per unit of risk. NH Investment Securities is currently generating about 0.39 per unit of volatility. If you would invest 1,347,000 in NH Investment Securities on November 7, 2024 and sell it today you would earn a total of 80,000 from holding NH Investment Securities or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Chemtech Co vs. NH Investment Securities
Performance |
| Timeline |
| Lion Chemtech |
| NH Investment Securities |
Lion Chemtech and NH Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Chemtech and NH Investment
The main advantage of trading using opposite Lion Chemtech and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Chemtech 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.| Lion Chemtech vs. ENERGYMACHINERY KOREA CoLtd | Lion Chemtech vs. Automobile Pc | Lion Chemtech vs. Seohee Construction Co | Lion Chemtech vs. Sangsin Energy Display |
| NH Investment vs. Heungkuk Metaltech CoLtd | NH Investment vs. Dongbang Transport Logistics | NH Investment vs. Samsung Life Insurance | NH Investment vs. Dongil Metal 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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