Correlation Between NSN and CJ ENM
Can any of the company-specific risk be diversified away by investing in both NSN and CJ ENM 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 NSN and CJ ENM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NSN Co and CJ ENM, you can compare the effects of market volatilities on NSN and CJ ENM 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 NSN with a short position of CJ ENM. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSN and CJ ENM.
Diversification Opportunities for NSN and CJ ENM
Very good diversification
The 3 months correlation between NSN and 035760 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding NSN Co and CJ ENM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CJ ENM and NSN 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 NSN Co are associated (or correlated) with CJ ENM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CJ ENM has no effect on the direction of NSN i.e., NSN and CJ ENM go up and down completely randomly.
Pair Corralation between NSN and CJ ENM
Assuming the 90 days trading horizon NSN Co is expected to generate 2.76 times more return on investment than CJ ENM. However, NSN is 2.76 times more volatile than CJ ENM. It trades about -0.01 of its potential returns per unit of risk. CJ ENM is currently generating about -0.04 per unit of risk. If you would invest 565,000 in NSN Co on November 2, 2024 and sell it today you would lose (440,000) from holding NSN Co or give up 77.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.03% |
| Values | Daily Returns |
NSN Co vs. CJ ENM
Performance |
| Timeline |
| NSN Co |
| CJ ENM |
NSN and CJ ENM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NSN and CJ ENM
The main advantage of trading using opposite NSN and CJ ENM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSN position performs unexpectedly, CJ ENM 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 CJ ENM will offset losses from the drop in CJ ENM's long position.| NSN vs. Digital Multimedia Technology | NSN vs. ChipsMedia | NSN vs. Koryo Credit Information | NSN vs. Cube Entertainment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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