Correlation Between Jahwa Electron and Daiyang Metal
Can any of the company-specific risk be diversified away by investing in both Jahwa Electron and Daiyang Metal 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 Daiyang Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jahwa Electron and Daiyang Metal Co, you can compare the effects of market volatilities on Jahwa Electron and Daiyang Metal 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 Daiyang Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahwa Electron and Daiyang Metal.
Diversification Opportunities for Jahwa Electron and Daiyang Metal
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jahwa and Daiyang is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electron and Daiyang Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiyang Metal 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 Daiyang Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiyang Metal has no effect on the direction of Jahwa Electron i.e., Jahwa Electron and Daiyang Metal go up and down completely randomly.
Pair Corralation between Jahwa Electron and Daiyang Metal
Assuming the 90 days trading horizon Jahwa Electron is expected to under-perform the Daiyang Metal. But the stock apears to be less risky and, when comparing its historical volatility, Jahwa Electron is 1.9 times less risky than Daiyang Metal. The stock trades about -0.08 of its potential returns per unit of risk. The Daiyang Metal Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 382,500 in Daiyang Metal Co on August 28, 2024 and sell it today you would lose (233,100) from holding Daiyang Metal Co or give up 60.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.53% |
| Values | Daily Returns |
Jahwa Electron vs. Daiyang Metal Co
Performance |
| Timeline |
| Jahwa Electron |
| Daiyang Metal |
Jahwa Electron and Daiyang Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jahwa Electron and Daiyang Metal
The main advantage of trading using opposite Jahwa Electron and Daiyang Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahwa Electron position performs unexpectedly, Daiyang Metal 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 Daiyang Metal will offset losses from the drop in Daiyang Metal'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 |
| Daiyang Metal vs. SCI Information Service | Daiyang Metal vs. Hyosung Advanced Materials | Daiyang Metal vs. LS Materials | Daiyang Metal vs. System and Application |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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