Correlation Between Nasmedia and Hana Technology

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Nasmedia and Hana Technology 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 Nasmedia and Hana Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasmedia Co and Hana Technology Co, you can compare the effects of market volatilities on Nasmedia and Hana Technology 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 Nasmedia with a short position of Hana Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasmedia and Hana Technology.

Diversification Opportunities for Nasmedia and Hana Technology

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Nasmedia and Hana is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nasmedia Co and Hana Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Technology and Nasmedia 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 Nasmedia Co are associated (or correlated) with Hana Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Technology has no effect on the direction of Nasmedia i.e., Nasmedia and Hana Technology go up and down completely randomly.

Pair Corralation between Nasmedia and Hana Technology

Assuming the 90 days trading horizon Nasmedia Co is expected to generate 0.38 times more return on investment than Hana Technology. However, Nasmedia Co is 2.64 times less risky than Hana Technology. It trades about -0.05 of its potential returns per unit of risk. Hana Technology Co is currently generating about -0.14 per unit of risk. If you would invest  1,539,000  in Nasmedia Co on September 15, 2024 and sell it today you would lose (75,000) from holding Nasmedia Co or give up 4.87% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Nasmedia Co  vs.  Hana Technology Co

 Performance 
       Timeline  
Nasmedia 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nasmedia Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nasmedia is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Hana Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hana Technology Co 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.

Nasmedia and Hana Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nasmedia and Hana Technology

The main advantage of trading using opposite Nasmedia and Hana Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasmedia position performs unexpectedly, Hana Technology 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 Hana Technology will offset losses from the drop in Hana Technology's long position.
The idea behind Nasmedia Co and Hana Technology Co 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

Other Complementary Tools

Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments