Correlation Between Jahwa Electron and Kumho Petro
Can any of the company-specific risk be diversified away by investing in both Jahwa Electron and Kumho Petro 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 Kumho Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jahwa Electron and Kumho Petro Chemical, you can compare the effects of market volatilities on Jahwa Electron and Kumho Petro 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 Kumho Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahwa Electron and Kumho Petro.
Diversification Opportunities for Jahwa Electron and Kumho Petro
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jahwa and Kumho is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electron and Kumho Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Petro Chemical 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 Kumho Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Petro Chemical has no effect on the direction of Jahwa Electron i.e., Jahwa Electron and Kumho Petro go up and down completely randomly.
Pair Corralation between Jahwa Electron and Kumho Petro
Assuming the 90 days trading horizon Jahwa Electron is expected to generate 1.27 times more return on investment than Kumho Petro. However, Jahwa Electron is 1.27 times more volatile than Kumho Petro Chemical. It trades about 0.27 of its potential returns per unit of risk. Kumho Petro Chemical is currently generating about 0.24 per unit of risk. If you would invest 1,179,000 in Jahwa Electron on October 30, 2024 and sell it today you would earn a total of 266,000 from holding Jahwa Electron or generate 22.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jahwa Electron vs. Kumho Petro Chemical
Performance |
| Timeline |
| Jahwa Electron |
| Kumho Petro Chemical |
Jahwa Electron and Kumho Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jahwa Electron and Kumho Petro
The main advantage of trading using opposite Jahwa Electron and Kumho Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahwa Electron position performs unexpectedly, Kumho Petro 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 Kumho Petro will offset losses from the drop in Kumho Petro's long position.| Jahwa Electron vs. Sangsangin Investment Securities | Jahwa Electron vs. SBI Investment KOREA | Jahwa Electron vs. Korea Air Svc | Jahwa Electron vs. Infinitt Healthcare Co |
| Kumho Petro vs. KB Financial Group | Kumho Petro vs. Shinhan Financial Group | Kumho Petro vs. Hana Financial | Kumho Petro vs. Woori Financial Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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