Correlation Between Jahwa Electron and Sunny Electronics
Can any of the company-specific risk be diversified away by investing in both Jahwa Electron and Sunny Electronics 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 Sunny Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jahwa Electron and Sunny Electronics Corp, you can compare the effects of market volatilities on Jahwa Electron and Sunny Electronics 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 Sunny Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahwa Electron and Sunny Electronics.
Diversification Opportunities for Jahwa Electron and Sunny Electronics
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jahwa and Sunny is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electron and Sunny Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Electronics Corp 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 Sunny Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Electronics Corp has no effect on the direction of Jahwa Electron i.e., Jahwa Electron and Sunny Electronics go up and down completely randomly.
Pair Corralation between Jahwa Electron and Sunny Electronics
Assuming the 90 days trading horizon Jahwa Electron is expected to under-perform the Sunny Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Jahwa Electron is 1.88 times less risky than Sunny Electronics. The stock trades about -0.12 of its potential returns per unit of risk. The Sunny Electronics Corp is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 153,700 in Sunny Electronics Corp on September 14, 2024 and sell it today you would earn a total of 139,300 from holding Sunny Electronics Corp or generate 90.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jahwa Electron vs. Sunny Electronics Corp
Performance |
| Timeline |
| Jahwa Electron |
| Sunny Electronics Corp |
Jahwa Electron and Sunny Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jahwa Electron and Sunny Electronics
The main advantage of trading using opposite Jahwa Electron and Sunny Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahwa Electron position performs unexpectedly, Sunny Electronics 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 Sunny Electronics will offset losses from the drop in Sunny Electronics' long position.| Jahwa Electron vs. Korea Computer | Jahwa Electron vs. Intellian Technologies | Jahwa Electron vs. Digital Power Communications | Jahwa Electron vs. Vitzro Tech Co |
| Sunny Electronics vs. Samsung Electronics Co | Sunny Electronics vs. Samsung Electronics Co | Sunny Electronics vs. SK Hynix | Sunny Electronics vs. POSCO Holdings |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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