Correlation Between NGG and HM Inwest
Can any of the company-specific risk be diversified away by investing in both NGG and HM Inwest 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 NGG and HM Inwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NGG and HM Inwest SA, you can compare the effects of market volatilities on NGG and HM Inwest 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 NGG with a short position of HM Inwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGG and HM Inwest.
Diversification Opportunities for NGG and HM Inwest
Pay attention - limited upside
The 3 months correlation between NGG and HMI is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding NGG and HM Inwest SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HM Inwest SA and NGG 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 NGG are associated (or correlated) with HM Inwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HM Inwest SA has no effect on the direction of NGG i.e., NGG and HM Inwest go up and down completely randomly.
Pair Corralation between NGG and HM Inwest
Assuming the 90 days trading horizon NGG is expected to generate 16.55 times more return on investment than HM Inwest. However, NGG is 16.55 times more volatile than HM Inwest SA. It trades about 0.06 of its potential returns per unit of risk. HM Inwest SA is currently generating about 0.04 per unit of risk. If you would invest 3.26 in NGG on September 2, 2024 and sell it today you would earn a total of 0.12 from holding NGG or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
NGG vs. HM Inwest SA
Performance |
| Timeline |
| NGG |
| HM Inwest SA |
NGG and HM Inwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NGG and HM Inwest
The main advantage of trading using opposite NGG and HM Inwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGG position performs unexpectedly, HM Inwest 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 HM Inwest will offset losses from the drop in HM Inwest's long position.| NGG vs. Asseco Business Solutions | NGG vs. Detalion Games SA | NGG vs. Asseco South Eastern | NGG vs. CFI Holding SA |
| HM Inwest vs. Carlson Investments SA | HM Inwest vs. Gaming Factory SA | HM Inwest vs. Enter Air SA | HM Inwest vs. PZ Cormay SA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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