Correlation Between Key Tronic and NeoMagic

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

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

Diversification Opportunities for Key Tronic and NeoMagic

0.0

Correlation Coefficient

Key Tronic  NeoMagic

Pay attention - limited upside

The 3 months correlation between Key and NeoMagic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Key Tronic and NeoMagic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoMagic and Key Tronic 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 Key Tronic are associated (or correlated) with NeoMagic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoMagic has no effect on the direction of Key Tronic i.e., Key Tronic and NeoMagic go up and down completely randomly.

Pair Corralation between Key Tronic and NeoMagic

If you would invest (100.00) in NeoMagic on December 19, 2024 and sell it today you would earn a total of  100.00  from holding NeoMagic or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Key Tronic  vs.  NeoMagic

Key Tronic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Key Tronic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

NeoMagic

Risk-Adjusted Performance

Very Weak

Over the last 90 days NeoMagic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, NeoMagic is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Key Tronic and NeoMagic

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

The idea behind Key Tronic and NeoMagic 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.