Correlation Between Dragonfly and JETEMA
Can any of the company-specific risk be diversified away by investing in both Dragonfly 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 Dragonfly and JETEMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dragonfly GF Co and JETEMA Co, you can compare the effects of market volatilities on Dragonfly 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 Dragonfly with a short position of JETEMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dragonfly and JETEMA.
Diversification Opportunities for Dragonfly and JETEMA
Pay attention - limited upside
The 3 months correlation between Dragonfly and JETEMA is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dragonfly GF Co and JETEMA Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JETEMA and Dragonfly 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 Dragonfly GF 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 Dragonfly i.e., Dragonfly and JETEMA go up and down completely randomly.
Pair Corralation between Dragonfly and JETEMA
Assuming the 90 days trading horizon Dragonfly GF Co is expected to under-perform the JETEMA. In addition to that, Dragonfly is 1.34 times more volatile than JETEMA Co. It trades about -0.06 of its total potential returns per unit of risk. JETEMA Co is currently generating about 0.03 per unit of volatility. If you would invest 1,570,000 in JETEMA Co on August 28, 2024 and sell it today you would earn a total of 362,000 from holding JETEMA Co or generate 23.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.52% |
| Values | Daily Returns |
Dragonfly GF Co vs. JETEMA Co
Performance |
| Timeline |
| Dragonfly GF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| JETEMA |
Dragonfly and JETEMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dragonfly and JETEMA
The main advantage of trading using opposite Dragonfly and JETEMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dragonfly 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.| Dragonfly vs. Samsung Electronics Co | Dragonfly vs. Samsung Electronics Co | Dragonfly vs. LG Energy Solution | Dragonfly vs. SK Hynix |
| JETEMA vs. Kolon Life Science | JETEMA vs. Aminologics CoLtd | JETEMA vs. Withuspharmaceutical CoLtd | JETEMA vs. High Tech Pharm |
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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