Correlation Between Nh Investment and Lotte Chilsung

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

Diversification Opportunities for Nh Investment and Lotte Chilsung

-0.18

Correlation Coefficient

Nh Investment  Lotte Chilsung

Good diversification

The 3 months correlation between 005945 and Lotte is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nh Investment And and Lotte Chilsung Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chilsung Beverage 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 Lotte Chilsung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chilsung Beverage has no effect on the direction of Nh Investment i.e., Nh Investment and Lotte Chilsung go up and down completely randomly.

Pair Corralation between Nh Investment and Lotte Chilsung

Assuming the 90 days trading horizon Nh Investment And is expected to generate 0.57 times more return on investment than Lotte Chilsung. However, Nh Investment And is 1.74 times less risky than Lotte Chilsung. It trades about 0.13 of its potential returns per unit of risk. Lotte Chilsung Beverage is currently generating about -0.05 per unit of risk. If you would invest  914,048  in Nh Investment And on September 14, 2024 and sell it today you would earn a total of  320,952  from holding Nh Investment And or generate 35.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.62%
Values	Daily Returns

Nh Investment And  vs.  Lotte Chilsung Beverage

Nh Investment And

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nh Investment And are ranked lower than 5 (%) 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.

Lotte Chilsung Beverage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lotte Chilsung Beverage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Nh Investment and Lotte Chilsung

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

The idea behind Nh Investment And and Lotte Chilsung Beverage 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.