Correlation Between Hana Microelectronics and NISSHA

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

By analyzing existing cross correlation between Hana Microelectronics Public and NISSHA LTD, you can compare the effects of market volatilities on Hana Microelectronics and NISSHA 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 Hana Microelectronics with a short position of NISSHA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and NISSHA.

Diversification Opportunities for Hana Microelectronics and NISSHA

0.27

Correlation Coefficient

Hana Microelectronics  NISSHA

Modest diversification

The 3 months correlation between Hana and NISSHA is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and NISSHA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSHA LTD and Hana Microelectronics 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 Hana Microelectronics Public are associated (or correlated) with NISSHA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSHA LTD has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and NISSHA go up and down completely randomly.

Pair Corralation between Hana Microelectronics and NISSHA

Assuming the 90 days trading horizon Hana Microelectronics Public is expected to generate 4.01 times more return on investment than NISSHA. However, Hana Microelectronics is 4.01 times more volatile than NISSHA LTD. It trades about 0.02 of its potential returns per unit of risk. NISSHA LTD is currently generating about -0.15 per unit of risk. If you would invest  69.00  in Hana Microelectronics Public on October 6, 2024 and sell it today you would lose (2.00) from holding Hana Microelectronics Public or give up 2.9% of portfolio value over 90 days.

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

Hana Microelectronics Public  vs.  NISSHA LTD

Hana Microelectronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hana Microelectronics Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hana Microelectronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

NISSHA LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NISSHA LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Hana Microelectronics and NISSHA

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

The idea behind Hana Microelectronics Public and NISSHA LTD 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.