Correlation Between Nh Investment and Finebesteel

Can any of the company-specific risk be diversified away by investing in both Nh Investment and Finebesteel 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 Finebesteel 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 Finebesteel, you can compare the effects of market volatilities on Nh Investment and Finebesteel 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 Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nh Investment and Finebesteel.

Diversification Opportunities for Nh Investment and Finebesteel

0.7

Correlation Coefficient

Nh Investment  Finebesteel

Poor diversification

The 3 months correlation between 005945 and Finebesteel is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Nh Investment And and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel 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 Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of Nh Investment i.e., Nh Investment and Finebesteel go up and down completely randomly.

Pair Corralation between Nh Investment and Finebesteel

Assuming the 90 days trading horizon Nh Investment And is expected to generate 0.19 times more return on investment than Finebesteel. However, Nh Investment And is 5.18 times less risky than Finebesteel. It trades about 0.26 of its potential returns per unit of risk. Finebesteel is currently generating about -0.02 per unit of risk. If you would invest  1,216,000  in Nh Investment And on December 28, 2024 and sell it today you would earn a total of  116,000  from holding Nh Investment And or generate 9.54% return on investment over 90 days.

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

Nh Investment And  vs.  Finebesteel

Nh Investment And

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nh Investment And are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nh Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Finebesteel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Finebesteel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Finebesteel 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 Finebesteel

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

The idea behind Nh Investment And and Finebesteel 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.