Correlation Between High Tech and JETEMA
Can any of the company-specific risk be diversified away by investing in both High Tech and JETEMA 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 High Tech and JETEMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Tech Pharm and JETEMA Co, you can compare the effects of market volatilities on High Tech and JETEMA 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 High Tech with a short position of JETEMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Tech and JETEMA.
Diversification Opportunities for High Tech and JETEMA
Weak diversification
The 3 months correlation between High and JETEMA is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding High Tech Pharm and JETEMA Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JETEMA and High Tech 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 High Tech Pharm are associated (or correlated) with JETEMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JETEMA has no effect on the direction of High Tech i.e., High Tech and JETEMA go up and down completely randomly.
Pair Corralation between High Tech and JETEMA
Assuming the 90 days trading horizon High Tech Pharm is expected to generate 0.97 times more return on investment than JETEMA. However, High Tech Pharm is 1.03 times less risky than JETEMA. It trades about 0.06 of its potential returns per unit of risk. JETEMA Co is currently generating about 0.0 per unit of risk. If you would invest 891,487 in High Tech Pharm on August 28, 2024 and sell it today you would earn a total of 523,513 from holding High Tech Pharm or generate 58.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Tech Pharm vs. JETEMA Co
Performance |
| Timeline |
| High Tech Pharm |
| JETEMA |
High Tech and JETEMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Tech and JETEMA
The main advantage of trading using opposite High Tech and JETEMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Tech position performs unexpectedly, JETEMA 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 JETEMA will offset losses from the drop in JETEMA's long position.| High Tech vs. Kolon Life Science | High Tech vs. Aminologics CoLtd | High Tech vs. Withuspharmaceutical CoLtd |
| JETEMA vs. Kolon Life Science | JETEMA vs. Aminologics CoLtd | JETEMA vs. Withuspharmaceutical CoLtd | JETEMA vs. High Tech Pharm |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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