Correlation Between Jahwa Electron and Sung Bo
Can any of the company-specific risk be diversified away by investing in both Jahwa Electron and Sung Bo 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 Jahwa Electron and Sung Bo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jahwa Electron and Sung Bo Chemicals, you can compare the effects of market volatilities on Jahwa Electron and Sung Bo 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 Jahwa Electron with a short position of Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahwa Electron and Sung Bo.
Diversification Opportunities for Jahwa Electron and Sung Bo
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jahwa and Sung is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electron and Sung Bo Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Bo Chemicals and Jahwa Electron 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 Jahwa Electron are associated (or correlated) with Sung Bo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Bo Chemicals has no effect on the direction of Jahwa Electron i.e., Jahwa Electron and Sung Bo go up and down completely randomly.
Pair Corralation between Jahwa Electron and Sung Bo
Assuming the 90 days trading horizon Jahwa Electron is expected to under-perform the Sung Bo. In addition to that, Jahwa Electron is 1.75 times more volatile than Sung Bo Chemicals. It trades about -0.08 of its total potential returns per unit of risk. Sung Bo Chemicals is currently generating about -0.03 per unit of volatility. If you would invest 323,468 in Sung Bo Chemicals on August 28, 2024 and sell it today you would lose (71,468) from holding Sung Bo Chemicals or give up 22.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jahwa Electron vs. Sung Bo Chemicals
Performance |
| Timeline |
| Jahwa Electron |
| Sung Bo Chemicals |
Jahwa Electron and Sung Bo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jahwa Electron and Sung Bo
The main advantage of trading using opposite Jahwa Electron and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahwa Electron position performs unexpectedly, Sung Bo 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 Sung Bo will offset losses from the drop in Sung Bo's long position.| Jahwa Electron vs. Korea Real Estate | Jahwa Electron vs. Korea Ratings Co | Jahwa Electron vs. IQuest Co | Jahwa Electron vs. Wonbang Tech Co |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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