Correlation Between JC Chemical and Namhae Chemical
Can any of the company-specific risk be diversified away by investing in both JC Chemical and Namhae 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 Namhae 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 Namhae Chemical, you can compare the effects of market volatilities on JC Chemical and Namhae 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 Namhae Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Chemical and Namhae Chemical.
Diversification Opportunities for JC Chemical and Namhae Chemical
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 137950 and Namhae is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding JC Chemical Co and Namhae Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namhae 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 Namhae Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namhae Chemical has no effect on the direction of JC Chemical i.e., JC Chemical and Namhae Chemical go up and down completely randomly.
Pair Corralation between JC Chemical and Namhae Chemical
Assuming the 90 days trading horizon JC Chemical Co is expected to under-perform the Namhae Chemical. In addition to that, JC Chemical is 2.59 times more volatile than Namhae Chemical. It trades about -0.43 of its total potential returns per unit of risk. Namhae Chemical is currently generating about 0.26 per unit of volatility. If you would invest 625,000 in Namhae Chemical on November 4, 2024 and sell it today you would earn a total of 16,000 from holding Namhae Chemical or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Chemical Co vs. Namhae Chemical
Performance |
| Timeline |
| JC Chemical |
| Namhae Chemical |
JC Chemical and Namhae Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Chemical and Namhae Chemical
The main advantage of trading using opposite JC Chemical and Namhae Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Chemical position performs unexpectedly, Namhae 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 Namhae Chemical will offset losses from the drop in Namhae Chemical's long position.| JC Chemical vs. Samsung Electronics Co | JC Chemical vs. Samsung Electronics Co | JC Chemical vs. SK Hynix | JC Chemical vs. HMM Co |
| Namhae Chemical vs. INNOX Advanced Materials | Namhae Chemical vs. Lake Materials Co | Namhae Chemical vs. Neungyule Education | Namhae Chemical vs. Ssangyong Materials Corp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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