Correlation Between JC Chemical and Daewon Chemical
Can any of the company-specific risk be diversified away by investing in both JC Chemical and Daewon Chemical 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 JC Chemical and Daewon Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JC Chemical Co and Daewon Chemical Co, you can compare the effects of market volatilities on JC Chemical and Daewon Chemical 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 JC Chemical with a short position of Daewon Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Chemical and Daewon Chemical.
Diversification Opportunities for JC Chemical and Daewon Chemical
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 137950 and Daewon is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding JC Chemical Co and Daewon Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Chemical and JC Chemical 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 JC Chemical Co are associated (or correlated) with Daewon Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Chemical has no effect on the direction of JC Chemical i.e., JC Chemical and Daewon Chemical go up and down completely randomly.
Pair Corralation between JC Chemical and Daewon Chemical
Assuming the 90 days trading horizon JC Chemical Co is expected to generate 0.79 times more return on investment than Daewon Chemical. However, JC Chemical Co is 1.27 times less risky than Daewon Chemical. It trades about -0.07 of its potential returns per unit of risk. Daewon Chemical Co is currently generating about -0.06 per unit of risk. If you would invest 522,115 in JC Chemical Co on October 26, 2024 and sell it today you would lose (145,615) from holding JC Chemical Co or give up 27.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Chemical Co vs. Daewon Chemical Co
Performance |
| Timeline |
| JC Chemical |
| Daewon Chemical |
JC Chemical and Daewon Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Chemical and Daewon Chemical
The main advantage of trading using opposite JC Chemical and Daewon Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Chemical position performs unexpectedly, Daewon Chemical 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 Daewon Chemical will offset losses from the drop in Daewon Chemical's long position.| JC Chemical vs. Dongsin Engineering Construction | JC Chemical vs. Doosan Fuel Cell | JC Chemical vs. Daishin Balance 1 | JC Chemical vs. Total Soft Bank |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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