Correlation Between HMM and Jahwa Electron
Can any of the company-specific risk be diversified away by investing in both HMM and Jahwa Electron 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 HMM and Jahwa Electron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMM Co and Jahwa Electron, you can compare the effects of market volatilities on HMM and Jahwa Electron 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 HMM with a short position of Jahwa Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMM and Jahwa Electron.
Diversification Opportunities for HMM and Jahwa Electron
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HMM and Jahwa is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding HMM Co and Jahwa Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jahwa Electron and HMM 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 HMM Co are associated (or correlated) with Jahwa Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jahwa Electron has no effect on the direction of HMM i.e., HMM and Jahwa Electron go up and down completely randomly.
Pair Corralation between HMM and Jahwa Electron
Assuming the 90 days trading horizon HMM Co is expected to under-perform the Jahwa Electron. But the stock apears to be less risky and, when comparing its historical volatility, HMM Co is 1.45 times less risky than Jahwa Electron. The stock trades about -0.04 of its potential returns per unit of risk. The Jahwa Electron is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,247,000 in Jahwa Electron on November 6, 2024 and sell it today you would earn a total of 298,000 from holding Jahwa Electron or generate 23.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMM Co vs. Jahwa Electron
Performance |
| Timeline |
| HMM Co |
| Jahwa Electron |
HMM and Jahwa Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMM and Jahwa Electron
The main advantage of trading using opposite HMM and Jahwa Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMM position performs unexpectedly, Jahwa Electron 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 Jahwa Electron will offset losses from the drop in Jahwa Electron's long position.| HMM vs. EBEST Investment Securities | HMM vs. Golden Bridge Investment | HMM vs. Seah Steel Corp | HMM vs. Fine Besteel Co |
| Jahwa Electron vs. Seah Steel Corp | Jahwa Electron vs. iNtRON Biotechnology | Jahwa Electron vs. Hironic Co | Jahwa Electron vs. Fine Besteel 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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