Correlation Between NH SPAC and HANA Micron
Can any of the company-specific risk be diversified away by investing in both NH SPAC and HANA Micron 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 NH SPAC and HANA Micron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH SPAC 8 and HANA Micron, you can compare the effects of market volatilities on NH SPAC and HANA Micron 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 NH SPAC with a short position of HANA Micron. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH SPAC and HANA Micron.
Diversification Opportunities for NH SPAC and HANA Micron
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 218410 and HANA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding NH SPAC 8 and HANA Micron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANA Micron and NH SPAC 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 NH SPAC 8 are associated (or correlated) with HANA Micron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANA Micron has no effect on the direction of NH SPAC i.e., NH SPAC and HANA Micron go up and down completely randomly.
Pair Corralation between NH SPAC and HANA Micron
Assuming the 90 days trading horizon NH SPAC is expected to generate 2.29 times less return on investment than HANA Micron. But when comparing it to its historical volatility, NH SPAC 8 is 1.06 times less risky than HANA Micron. It trades about 0.1 of its potential returns per unit of risk. HANA Micron is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,025,000 in HANA Micron on November 27, 2024 and sell it today you would earn a total of 144,000 from holding HANA Micron or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
NH SPAC 8 vs. HANA Micron
Performance |
| Timeline |
| NH SPAC 8 |
| HANA Micron |
NH SPAC and HANA Micron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH SPAC and HANA Micron
The main advantage of trading using opposite NH SPAC and HANA Micron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH SPAC position performs unexpectedly, HANA Micron 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 Micron will offset losses from the drop in HANA Micron's long position.| NH SPAC vs. Samsung Electronics Co | NH SPAC vs. Samsung Electronics Co | NH SPAC vs. LG Energy Solution | NH SPAC vs. SK Hynix |
| HANA Micron vs. Samsung Electronics Co | HANA Micron vs. Samsung Electronics Co | HANA Micron vs. SK Hynix | HANA Micron vs. HMM Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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