Correlation Between Jahwa Electron and RS Automation
Can any of the company-specific risk be diversified away by investing in both Jahwa Electron and RS Automation 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 RS Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jahwa Electron and RS Automation CoLtd, you can compare the effects of market volatilities on Jahwa Electron and RS Automation 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 RS Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahwa Electron and RS Automation.
Diversification Opportunities for Jahwa Electron and RS Automation
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jahwa and 140670 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electron and RS Automation CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RS Automation CoLtd 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 RS Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RS Automation CoLtd has no effect on the direction of Jahwa Electron i.e., Jahwa Electron and RS Automation go up and down completely randomly.
Pair Corralation between Jahwa Electron and RS Automation
Assuming the 90 days trading horizon Jahwa Electron is expected to under-perform the RS Automation. But the stock apears to be less risky and, when comparing its historical volatility, Jahwa Electron is 1.44 times less risky than RS Automation. The stock trades about -0.04 of its potential returns per unit of risk. The RS Automation CoLtd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,384,000 in RS Automation CoLtd on November 27, 2024 and sell it today you would earn a total of 371,000 from holding RS Automation CoLtd or generate 26.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jahwa Electron vs. RS Automation CoLtd
Performance |
| Timeline |
| Jahwa Electron |
| RS Automation CoLtd |
Jahwa Electron and RS Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jahwa Electron and RS Automation
The main advantage of trading using opposite Jahwa Electron and RS Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahwa Electron position performs unexpectedly, RS Automation 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 RS Automation will offset losses from the drop in RS Automation's long position.| Jahwa Electron vs. Dgb Financial | Jahwa Electron vs. Lotte Non Life Insurance | Jahwa Electron vs. DB Financial Investment | Jahwa Electron vs. InfoBank |
| RS Automation vs. Sangsangin Investment Securities | RS Automation vs. NH Investment Securities | RS Automation vs. LB Investment | RS Automation vs. Daejung Chemicals Metals |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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