Correlation Between LS Materials and Nh Investment
Can any of the company-specific risk be diversified away by investing in both LS Materials 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 LS Materials and Nh Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Materials and Nh Investment And, you can compare the effects of market volatilities on LS Materials 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 LS Materials with a short position of Nh Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Materials and Nh Investment.
Diversification Opportunities for LS Materials and Nh Investment
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 417200 and 005945 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding LS Materials 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 LS Materials 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 LS Materials 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 LS Materials i.e., LS Materials and Nh Investment go up and down completely randomly.
Pair Corralation between LS Materials and Nh Investment
Assuming the 90 days trading horizon LS Materials is expected to generate 12.04 times more return on investment than Nh Investment. However, LS Materials is 12.04 times more volatile than Nh Investment And. It trades about 0.1 of its potential returns per unit of risk. Nh Investment And is currently generating about 0.41 per unit of risk. If you would invest 1,195,000 in LS Materials on November 8, 2024 and sell it today you would earn a total of 100,000 from holding LS Materials or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LS Materials vs. Nh Investment And
Performance |
| Timeline |
| LS Materials |
| Nh Investment And |
LS Materials and Nh Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Materials and Nh Investment
The main advantage of trading using opposite LS Materials and Nh Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Materials 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.| LS Materials vs. Sejong Telecom | LS Materials vs. Daejoo Electronic Materials | LS Materials vs. Nice Information Telecommunication | LS Materials vs. KyungIn Electronics Co |
| Nh Investment vs. Hanwha InvestmentSecurities Co | Nh Investment vs. FnGuide | Nh Investment vs. DSC Investment | Nh Investment vs. Samsung Special Purpose |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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