Correlation Between Osang Healthcare and Jahwa Electron
Can any of the company-specific risk be diversified away by investing in both Osang Healthcare and Jahwa Electron 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 Osang Healthcare and Jahwa Electron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osang Healthcare Co,Ltd and Jahwa Electron, you can compare the effects of market volatilities on Osang Healthcare and Jahwa Electron 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 Osang Healthcare with a short position of Jahwa Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osang Healthcare and Jahwa Electron.
Diversification Opportunities for Osang Healthcare and Jahwa Electron
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Osang and Jahwa is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Osang Healthcare Co,Ltd and Jahwa Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jahwa Electron and Osang Healthcare 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 Osang Healthcare Co,Ltd are associated (or correlated) with Jahwa Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jahwa Electron has no effect on the direction of Osang Healthcare i.e., Osang Healthcare and Jahwa Electron go up and down completely randomly.
Pair Corralation between Osang Healthcare and Jahwa Electron
Assuming the 90 days trading horizon Osang Healthcare Co,Ltd is expected to generate 0.96 times more return on investment than Jahwa Electron. However, Osang Healthcare Co,Ltd is 1.04 times less risky than Jahwa Electron. It trades about 0.06 of its potential returns per unit of risk. Jahwa Electron is currently generating about -0.08 per unit of risk. If you would invest 1,144,000 in Osang Healthcare Co,Ltd on September 24, 2024 and sell it today you would earn a total of 40,000 from holding Osang Healthcare Co,Ltd or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Osang Healthcare Co,Ltd vs. Jahwa Electron
Performance |
| Timeline |
| Osang Healthcare Co,Ltd |
| Jahwa Electron |
Osang Healthcare and Jahwa Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osang Healthcare and Jahwa Electron
The main advantage of trading using opposite Osang Healthcare and Jahwa Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osang Healthcare position performs unexpectedly, Jahwa Electron 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 Jahwa Electron will offset losses from the drop in Jahwa Electron's long position.| Osang Healthcare vs. Samsung Electronics Co | Osang Healthcare vs. Samsung Electronics Co | Osang Healthcare vs. LG Energy Solution | Osang Healthcare vs. SK Hynix |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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