Correlation Between Daiyang Metal and JETEMA
Can any of the company-specific risk be diversified away by investing in both Daiyang Metal and JETEMA 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 Daiyang Metal and JETEMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiyang Metal Co and JETEMA Co, you can compare the effects of market volatilities on Daiyang Metal and JETEMA 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 Daiyang Metal with a short position of JETEMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiyang Metal and JETEMA.
Diversification Opportunities for Daiyang Metal and JETEMA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daiyang and JETEMA is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Daiyang Metal Co and JETEMA Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JETEMA and Daiyang Metal 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 Daiyang Metal Co are associated (or correlated) with JETEMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JETEMA has no effect on the direction of Daiyang Metal i.e., Daiyang Metal and JETEMA go up and down completely randomly.
Pair Corralation between Daiyang Metal and JETEMA
Assuming the 90 days trading horizon Daiyang Metal Co is expected to under-perform the JETEMA. But the stock apears to be less risky and, when comparing its historical volatility, Daiyang Metal Co is 1.17 times less risky than JETEMA. The stock trades about -0.17 of its potential returns per unit of risk. The JETEMA Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,941,000 in JETEMA Co on September 1, 2024 and sell it today you would earn a total of 8,000 from holding JETEMA Co or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daiyang Metal Co vs. JETEMA Co
Performance |
| Timeline |
| Daiyang Metal |
| JETEMA |
Daiyang Metal and JETEMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiyang Metal and JETEMA
The main advantage of trading using opposite Daiyang Metal and JETEMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiyang Metal position performs unexpectedly, JETEMA 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 JETEMA will offset losses from the drop in JETEMA's long position.| Daiyang Metal vs. LG Household Healthcare | Daiyang Metal vs. Daejung Chemicals Metals | Daiyang Metal vs. LG Chemicals | Daiyang Metal vs. SK Chemicals Co |
| JETEMA vs. Sam Yang Foods | JETEMA vs. Daiyang Metal Co | JETEMA vs. Sempio Foods Co | JETEMA vs. Songwon Industrial 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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