Correlation Between Jahwa Electronics and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Jahwa Electronics and Hyundai Home 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 Electronics and Hyundai Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jahwa Electronics Co and Hyundai Home Shopping, you can compare the effects of market volatilities on Jahwa Electronics and Hyundai Home 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 Electronics with a short position of Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahwa Electronics and Hyundai Home.
Diversification Opportunities for Jahwa Electronics and Hyundai Home
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jahwa and Hyundai is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electronics Co and Hyundai Home Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Home Shopping and Jahwa Electronics 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 Electronics Co are associated (or correlated) with Hyundai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Home Shopping has no effect on the direction of Jahwa Electronics i.e., Jahwa Electronics and Hyundai Home go up and down completely randomly.
Pair Corralation between Jahwa Electronics and Hyundai Home
Assuming the 90 days trading horizon Jahwa Electronics Co is expected to generate 2.63 times more return on investment than Hyundai Home. However, Jahwa Electronics is 2.63 times more volatile than Hyundai Home Shopping. It trades about 0.36 of its potential returns per unit of risk. Hyundai Home Shopping is currently generating about 0.34 per unit of risk. If you would invest 1,247,000 in Jahwa Electronics Co on November 7, 2024 and sell it today you would earn a total of 443,000 from holding Jahwa Electronics Co or generate 35.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jahwa Electronics Co vs. Hyundai Home Shopping
Performance |
| Timeline |
| Jahwa Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Hyundai Home Shopping |
Jahwa Electronics and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jahwa Electronics and Hyundai Home
The main advantage of trading using opposite Jahwa Electronics and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahwa Electronics position performs unexpectedly, Hyundai Home 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 Hyundai Home will offset losses from the drop in Hyundai Home's long position.| Jahwa Electronics vs. Daehan Synthetic Fiber | Jahwa Electronics vs. TK Chemical | Jahwa Electronics vs. JC Chemical Co | Jahwa Electronics vs. Posco Chemical Co |
| Hyundai Home vs. SK Chemicals Co | Hyundai Home vs. Aekyung Petrochemical Co | Hyundai Home vs. Neungyule Education | Hyundai Home vs. Samsung Life Insurance |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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