Correlation Between Jahwa Electron and Korea Aerospace
Can any of the company-specific risk be diversified away by investing in both Jahwa Electron and Korea Aerospace 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 Korea Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jahwa Electron and Korea Aerospace Industries, you can compare the effects of market volatilities on Jahwa Electron and Korea Aerospace 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 Korea Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahwa Electron and Korea Aerospace.
Diversification Opportunities for Jahwa Electron and Korea Aerospace
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jahwa and Korea is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electron and Korea Aerospace Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Aerospace Indu 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 Korea Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Aerospace Indu has no effect on the direction of Jahwa Electron i.e., Jahwa Electron and Korea Aerospace go up and down completely randomly.
Pair Corralation between Jahwa Electron and Korea Aerospace
Assuming the 90 days trading horizon Jahwa Electron is expected to under-perform the Korea Aerospace. In addition to that, Jahwa Electron is 1.2 times more volatile than Korea Aerospace Industries. It trades about -0.19 of its total potential returns per unit of risk. Korea Aerospace Industries is currently generating about 0.06 per unit of volatility. If you would invest 5,100,000 in Korea Aerospace Industries on September 3, 2024 and sell it today you would earn a total of 740,000 from holding Korea Aerospace Industries or generate 14.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jahwa Electron vs. Korea Aerospace Industries
Performance |
| Timeline |
| Jahwa Electron |
| Korea Aerospace Indu |
Jahwa Electron and Korea Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jahwa Electron and Korea Aerospace
The main advantage of trading using opposite Jahwa Electron and Korea Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahwa Electron position performs unexpectedly, Korea Aerospace 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 Korea Aerospace will offset losses from the drop in Korea Aerospace's long position.| Jahwa Electron vs. Nam Hwa Construction | Jahwa Electron vs. Woorim Machinery Co | Jahwa Electron vs. GS Engineering Construction | Jahwa Electron vs. AeroSpace Technology of |
| Korea Aerospace vs. LG Display | Korea Aerospace vs. Hyundai Motor | Korea Aerospace vs. Hyundai Motor Co | Korea Aerospace vs. Hyundai Motor Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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