Correlation Between JUSUNG ENGINEERING and Humasis
Can any of the company-specific risk be diversified away by investing in both JUSUNG ENGINEERING and Humasis 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 JUSUNG ENGINEERING and Humasis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JUSUNG ENGINEERING Co and Humasis Co, you can compare the effects of market volatilities on JUSUNG ENGINEERING and Humasis 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 JUSUNG ENGINEERING with a short position of Humasis. Check out your portfolio center. Please also check ongoing floating volatility patterns of JUSUNG ENGINEERING and Humasis.
Diversification Opportunities for JUSUNG ENGINEERING and Humasis
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between JUSUNG and Humasis is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding JUSUNG ENGINEERING Co and Humasis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humasis and JUSUNG ENGINEERING 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 JUSUNG ENGINEERING Co are associated (or correlated) with Humasis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humasis has no effect on the direction of JUSUNG ENGINEERING i.e., JUSUNG ENGINEERING and Humasis go up and down completely randomly.
Pair Corralation between JUSUNG ENGINEERING and Humasis
Assuming the 90 days trading horizon JUSUNG ENGINEERING is expected to generate 2.29 times less return on investment than Humasis. But when comparing it to its historical volatility, JUSUNG ENGINEERING Co is 2.09 times less risky than Humasis. It trades about 0.13 of its potential returns per unit of risk. Humasis Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 151,500 in Humasis Co on August 28, 2024 and sell it today you would earn a total of 37,000 from holding Humasis Co or generate 24.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JUSUNG ENGINEERING Co vs. Humasis Co
Performance |
| Timeline |
| JUSUNG ENGINEERING |
| Humasis |
JUSUNG ENGINEERING and Humasis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JUSUNG ENGINEERING and Humasis
The main advantage of trading using opposite JUSUNG ENGINEERING and Humasis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JUSUNG ENGINEERING position performs unexpectedly, Humasis 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 Humasis will offset losses from the drop in Humasis' long position.The idea behind JUSUNG ENGINEERING Co and Humasis Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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