Correlation Between Shin Steel and Nh Investment

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

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

Diversification Opportunities for Shin Steel and Nh Investment

0.05

Correlation Coefficient

Shin Steel  Nh Investment

Significant diversification

The 3 months correlation between Shin and 005945 is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Shin Steel Co 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 Shin Steel 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 Shin Steel Co 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 Shin Steel i.e., Shin Steel and Nh Investment go up and down completely randomly.

Pair Corralation between Shin Steel and Nh Investment

Assuming the 90 days trading horizon Shin Steel is expected to generate 2.17 times less return on investment than Nh Investment. In addition to that, Shin Steel is 3.42 times more volatile than Nh Investment And. It trades about 0.02 of its total potential returns per unit of risk. Nh Investment And is currently generating about 0.12 per unit of volatility. If you would invest  1,203,000  in Nh Investment And on October 27, 2024 and sell it today you would earn a total of  77,000  from holding Nh Investment And or generate 6.4% return on investment over 90 days.

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

Shin Steel Co  vs.  Nh Investment And

Shin Steel

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shin Steel Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shin Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nh Investment And

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nh Investment And are ranked lower than 9 (%) 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 February 2025.

Pair Trading with Shin Steel and Nh Investment

The main advantage of trading using opposite Shin Steel and Nh Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shin Steel 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.

The idea behind Shin Steel Co and Nh Investment And 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.