Correlation Between LB Investment and NH Investment
Can any of the company-specific risk be diversified away by investing in both LB 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 LB 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 LB Investment and NH Investment Securities, you can compare the effects of market volatilities on LB 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 LB Investment with a short position of NH Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LB Investment and NH Investment.
Diversification Opportunities for LB Investment and NH Investment
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 309960 and 005940 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding LB Investment 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 LB 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 LB Investment 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 LB Investment i.e., LB Investment and NH Investment go up and down completely randomly.
Pair Corralation between LB Investment and NH Investment
Assuming the 90 days trading horizon LB Investment is expected to generate 2.01 times less return on investment than NH Investment. In addition to that, LB Investment is 1.17 times more volatile than NH Investment Securities. It trades about 0.03 of its total potential returns per unit of risk. NH Investment Securities is currently generating about 0.08 per unit of volatility. If you would invest 1,365,000 in NH Investment Securities on October 21, 2024 and sell it today you would earn a total of 26,000 from holding NH Investment Securities or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LB Investment vs. NH Investment Securities
Performance |
| Timeline |
| LB Investment |
| NH Investment Securities |
LB Investment and NH Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LB Investment and NH Investment
The main advantage of trading using opposite LB Investment and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LB 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.| LB Investment vs. Hotel Shilla Co | LB Investment vs. Hanjin Transportation Co | LB Investment vs. Camus Engineering Construction | LB Investment vs. KCC Engineering Construction |
| NH Investment vs. Organic Special Pet | NH Investment vs. Ssangyong Information Communication | NH Investment vs. Insung Information Co | NH Investment vs. Moadata 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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