Correlation Between Jahwa Electronics and Dreamus
Can any of the company-specific risk be diversified away by investing in both Jahwa Electronics and Dreamus 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 Dreamus 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 Dreamus Company, you can compare the effects of market volatilities on Jahwa Electronics and Dreamus 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 Dreamus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahwa Electronics and Dreamus.
Diversification Opportunities for Jahwa Electronics and Dreamus
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jahwa and Dreamus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electronics Co and Dreamus Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreamus Company 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 Dreamus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreamus Company has no effect on the direction of Jahwa Electronics i.e., Jahwa Electronics and Dreamus go up and down completely randomly.
Pair Corralation between Jahwa Electronics and Dreamus
Assuming the 90 days trading horizon Jahwa Electronics Co is expected to generate 0.87 times more return on investment than Dreamus. However, Jahwa Electronics Co is 1.15 times less risky than Dreamus. It trades about -0.03 of its potential returns per unit of risk. Dreamus Company is currently generating about -0.03 per unit of risk. If you would invest 2,785,000 in Jahwa Electronics Co on November 6, 2024 and sell it today you would lose (1,240,000) from holding Jahwa Electronics Co or give up 44.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jahwa Electronics Co vs. Dreamus Company
Performance |
| Timeline |
| Jahwa Electronics |
| Dreamus Company |
Jahwa Electronics and Dreamus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jahwa Electronics and Dreamus
The main advantage of trading using opposite Jahwa Electronics and Dreamus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahwa Electronics position performs unexpectedly, Dreamus 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 Dreamus will offset losses from the drop in Dreamus' long position.| Jahwa Electronics vs. Samlip General Foods | Jahwa Electronics vs. Automobile Pc | Jahwa Electronics vs. Daeduck Electronics Co | Jahwa Electronics vs. Sempio Foods Co |
| Dreamus vs. Samsung Electronics Co | Dreamus vs. Samsung Electronics Co | Dreamus vs. Hyundai Motor Co | Dreamus vs. Hyundai Motor |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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