Correlation Between Nh Investment and Gs Retail

Can any of the company-specific risk be diversified away by investing in both Nh Investment and Gs Retail 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 Nh Investment and Gs Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nh Investment And and Gs Retail, you can compare the effects of market volatilities on Nh Investment and Gs Retail 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 Nh Investment with a short position of Gs Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nh Investment and Gs Retail.

Diversification Opportunities for Nh Investment and Gs Retail

0.58

Correlation Coefficient

Nh Investment  Gs Retail

Very weak diversification

The 3 months correlation between 005945 and 007070 is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nh Investment And and Gs Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gs Retail and Nh 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 Nh Investment And are associated (or correlated) with Gs Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gs Retail has no effect on the direction of Nh Investment i.e., Nh Investment and Gs Retail go up and down completely randomly.

Pair Corralation between Nh Investment and Gs Retail

Assuming the 90 days trading horizon Nh Investment is expected to generate 2.19 times less return on investment than Gs Retail. But when comparing it to its historical volatility, Nh Investment And is 1.88 times less risky than Gs Retail. It trades about 0.05 of its potential returns per unit of risk. Gs Retail is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,201,863  in Gs Retail on September 22, 2024 and sell it today you would earn a total of  113,137  from holding Gs Retail or generate 5.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nh Investment And  vs.  Gs Retail

Nh Investment And

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nh Investment And are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Nh Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gs Retail

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gs Retail are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Gs Retail is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nh Investment and Gs Retail

The main advantage of trading using opposite Nh Investment and Gs Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nh Investment position performs unexpectedly, Gs Retail 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 Gs Retail will offset losses from the drop in Gs Retail's long position.

The idea behind Nh Investment And and Gs Retail pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.