Correlation Between Jahwa Electronics and THiRA UTECH
Can any of the company-specific risk be diversified away by investing in both Jahwa Electronics and THiRA UTECH 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 THiRA UTECH 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 THiRA UTECH LTD, you can compare the effects of market volatilities on Jahwa Electronics and THiRA UTECH 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 THiRA UTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jahwa Electronics and THiRA UTECH.
Diversification Opportunities for Jahwa Electronics and THiRA UTECH
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jahwa and THiRA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electronics Co and THiRA UTECH LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THiRA UTECH LTD 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 THiRA UTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THiRA UTECH LTD has no effect on the direction of Jahwa Electronics i.e., Jahwa Electronics and THiRA UTECH go up and down completely randomly.
Pair Corralation between Jahwa Electronics and THiRA UTECH
Assuming the 90 days trading horizon Jahwa Electronics is expected to generate 1.3 times less return on investment than THiRA UTECH. In addition to that, Jahwa Electronics is 1.04 times more volatile than THiRA UTECH LTD. It trades about 0.26 of its total potential returns per unit of risk. THiRA UTECH LTD is currently generating about 0.35 per unit of volatility. If you would invest 441,500 in THiRA UTECH LTD on October 25, 2024 and sell it today you would earn a total of 132,500 from holding THiRA UTECH LTD or generate 30.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Jahwa Electronics Co vs. THiRA UTECH LTD
Performance |
| Timeline |
| Jahwa Electronics |
| THiRA UTECH LTD |
Jahwa Electronics and THiRA UTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jahwa Electronics and THiRA UTECH
The main advantage of trading using opposite Jahwa Electronics and THiRA UTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jahwa Electronics position performs unexpectedly, THiRA UTECH 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 THiRA UTECH will offset losses from the drop in THiRA UTECH's long position.| Jahwa Electronics vs. KB Financial Group | Jahwa Electronics vs. Shinhan Financial Group | Jahwa Electronics vs. Hana Financial | Jahwa Electronics vs. Woori Financial Group |
| THiRA UTECH vs. Jahwa Electronics Co | THiRA UTECH vs. Okins Electronics Co | THiRA UTECH vs. NH Investment Securities | THiRA UTECH vs. Daol Investment Securities |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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