Correlation Between CJ ENM and NH Investment

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

Diversification Opportunities for CJ ENM and NH Investment

0.39
  Correlation Coefficient

Weak diversification

The 3 months correlation between 035760 and 005940 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CJ ENM 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 CJ ENM 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 CJ ENM 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 CJ ENM i.e., CJ ENM and NH Investment go up and down completely randomly.

Pair Corralation between CJ ENM and NH Investment

Assuming the 90 days trading horizon CJ ENM is expected to generate 1.52 times more return on investment than NH Investment. However, CJ ENM is 1.52 times more volatile than NH Investment Securities. It trades about 0.13 of its potential returns per unit of risk. NH Investment Securities is currently generating about 0.0 per unit of risk. If you would invest  5,450,000  in CJ ENM on September 12, 2024 and sell it today you would earn a total of  420,000  from holding CJ ENM or generate 7.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

CJ ENM  vs.  NH Investment Securities

 Performance 
       Timeline  
CJ ENM 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CJ ENM 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.
NH Investment Securities 

Risk-Adjusted Performance

0 of 100

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

CJ ENM and NH Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CJ ENM and NH Investment

The main advantage of trading using opposite CJ ENM and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ ENM 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 CJ ENM 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.
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

Other Complementary Tools

Share Portfolio
Track or share privately all of your investments from the convenience of any device
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Bonds Directory
Find actively traded corporate debentures issued by US companies
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Equity Valuation
Check real value of public entities based on technical and fundamental data