Correlation Between Jahwa Electron and KMH Hitech
Can any of the company-specific risk be diversified away by investing in both Jahwa Electron and KMH Hitech 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 KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jahwa Electron and KMH Hitech Co, you can compare the effects of market volatilities on Jahwa Electron and KMH Hitech 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 KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahwa Electron and KMH Hitech.
Diversification Opportunities for Jahwa Electron and KMH Hitech
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jahwa and KMH is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electron and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech 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 KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of Jahwa Electron i.e., Jahwa Electron and KMH Hitech go up and down completely randomly.
Pair Corralation between Jahwa Electron and KMH Hitech
Assuming the 90 days trading horizon Jahwa Electron is expected to under-perform the KMH Hitech. In addition to that, Jahwa Electron is 1.43 times more volatile than KMH Hitech Co. It trades about -0.15 of its total potential returns per unit of risk. KMH Hitech Co is currently generating about -0.07 per unit of volatility. If you would invest 122,000 in KMH Hitech Co on October 13, 2024 and sell it today you would lose (26,400) from holding KMH Hitech Co or give up 21.64% 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. KMH Hitech Co
Performance |
| Timeline |
| Jahwa Electron |
| KMH Hitech |
Jahwa Electron and KMH Hitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jahwa Electron and KMH Hitech
The main advantage of trading using opposite Jahwa Electron and KMH Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahwa Electron position performs unexpectedly, KMH Hitech 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 KMH Hitech will offset losses from the drop in KMH Hitech's long position.| Jahwa Electron vs. KMH Hitech Co | Jahwa Electron vs. GemVaxKAEL CoLtd | Jahwa Electron vs. Bosung Power Technology | Jahwa Electron vs. Busan Industrial 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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