Correlation Between KyungIn Electronics and NH Investment

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

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

Diversification Opportunities for KyungIn Electronics and NH Investment

-0.8

Correlation Coefficient

KyungIn Electronics  NH Investment

Pay attention - limited upside

The 3 months correlation between KyungIn and 005940 is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding KyungIn Electronics Co and NH Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Investment Securities and KyungIn Electronics 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 KyungIn Electronics 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 Securities has no effect on the direction of KyungIn Electronics i.e., KyungIn Electronics and NH Investment go up and down completely randomly.

Pair Corralation between KyungIn Electronics and NH Investment

Assuming the 90 days trading horizon KyungIn Electronics Co is expected to under-perform the NH Investment. But the stock apears to be less risky and, when comparing its historical volatility, KyungIn Electronics Co is 1.6 times less risky than NH Investment. The stock trades about -0.15 of its potential returns per unit of risk. The NH Investment Securities is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,414,000  in NH Investment Securities on December 25, 2024 and sell it today you would earn a total of  79,000  from holding NH Investment Securities or generate 5.59% return on investment over 90 days.

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

KyungIn Electronics Co  vs.  NH Investment Securities

KyungIn Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days KyungIn Electronics Co 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.

NH Investment Securities

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NH Investment Securities are ranked lower than 6 (%) 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.

Pair Trading with KyungIn Electronics and NH Investment

The main advantage of trading using opposite KyungIn Electronics and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KyungIn Electronics 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 KyungIn Electronics Co and NH Investment Securities 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.