Correlation Between Jahwa Electron and Innometry
Can any of the company-specific risk be diversified away by investing in both Jahwa Electron and Innometry 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 Innometry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jahwa Electron and Innometry Co, you can compare the effects of market volatilities on Jahwa Electron and Innometry 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 Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahwa Electron and Innometry.
Diversification Opportunities for Jahwa Electron and Innometry
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jahwa and Innometry is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electron and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry 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 Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of Jahwa Electron i.e., Jahwa Electron and Innometry go up and down completely randomly.
Pair Corralation between Jahwa Electron and Innometry
Assuming the 90 days trading horizon Jahwa Electron is expected to under-perform the Innometry. In addition to that, Jahwa Electron is 1.13 times more volatile than Innometry Co. It trades about -0.23 of its total potential returns per unit of risk. Innometry Co is currently generating about -0.13 per unit of volatility. If you would invest 1,011,000 in Innometry Co on August 28, 2024 and sell it today you would lose (200,000) from holding Innometry Co or give up 19.78% 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. Innometry Co
Performance |
| Timeline |
| Jahwa Electron |
| Innometry |
Jahwa Electron and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jahwa Electron and Innometry
The main advantage of trading using opposite Jahwa Electron and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahwa Electron position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.| Jahwa Electron vs. Homecast CoLtd | Jahwa Electron vs. TJ media Co | Jahwa Electron vs. Hannong Chemicals | Jahwa Electron vs. Daejung Chemicals Metals |
| Innometry vs. Daejoo Electronic Materials | Innometry vs. Parksystems Corp | Innometry vs. BH Co | Innometry vs. Partron 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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