Correlation Between Nh Investment and Jeju Semiconductor

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

Diversification Opportunities for Nh Investment and Jeju Semiconductor

-0.43

Correlation Coefficient

Nh Investment  Jeju Semiconductor

Very good diversification

The 3 months correlation between 005945 and Jeju is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Nh Investment And and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor Corp 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 Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of Nh Investment i.e., Nh Investment and Jeju Semiconductor go up and down completely randomly.

Pair Corralation between Nh Investment and Jeju Semiconductor

Assuming the 90 days trading horizon Nh Investment is expected to generate 2.8 times less return on investment than Jeju Semiconductor. But when comparing it to its historical volatility, Nh Investment And is 5.78 times less risky than Jeju Semiconductor. It trades about 0.13 of its potential returns per unit of risk. Jeju Semiconductor Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  523,000  in Jeju Semiconductor Corp on September 14, 2024 and sell it today you would earn a total of  366,000  from holding Jeju Semiconductor Corp or generate 69.98% 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.  Jeju Semiconductor Corp

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.

Jeju Semiconductor Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jeju Semiconductor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Nh Investment and Jeju Semiconductor

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

The idea behind Nh Investment And and Jeju Semiconductor Corp 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.