Correlation Between Nh Investment and Hanjoo Light

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

Diversification Opportunities for Nh Investment and Hanjoo Light

-0.55

Correlation Coefficient

Nh Investment  Hanjoo Light

Excellent diversification

The 3 months correlation between 005945 and Hanjoo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nh Investment And and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal 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 Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Nh Investment i.e., Nh Investment and Hanjoo Light go up and down completely randomly.

Pair Corralation between Nh Investment and Hanjoo Light

Assuming the 90 days trading horizon Nh Investment And is expected to generate 0.34 times more return on investment than Hanjoo Light. However, Nh Investment And is 2.98 times less risky than Hanjoo Light. It trades about 0.18 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.04 per unit of risk. If you would invest  1,244,000  in Nh Investment And on December 24, 2024 and sell it today you would earn a total of  85,000  from holding Nh Investment And or generate 6.83% return on investment over 90 days.

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

Nh Investment And  vs.  Hanjoo Light Metal

Nh Investment And

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nh Investment And are ranked lower than 14 (%) 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.

Hanjoo Light Metal

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Nh Investment And and Hanjoo Light Metal 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..