Correlation Between JC Chemical and Wonbang Tech
Can any of the company-specific risk be diversified away by investing in both JC Chemical and Wonbang Tech 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 Wonbang Tech 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 Wonbang Tech Co, you can compare the effects of market volatilities on JC Chemical and Wonbang Tech 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 Wonbang Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Chemical and Wonbang Tech.
Diversification Opportunities for JC Chemical and Wonbang Tech
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 137950 and Wonbang is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding JC Chemical Co and Wonbang Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonbang Tech 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 Wonbang Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonbang Tech has no effect on the direction of JC Chemical i.e., JC Chemical and Wonbang Tech go up and down completely randomly.
Pair Corralation between JC Chemical and Wonbang Tech
Assuming the 90 days trading horizon JC Chemical Co is expected to under-perform the Wonbang Tech. But the stock apears to be less risky and, when comparing its historical volatility, JC Chemical Co is 1.48 times less risky than Wonbang Tech. The stock trades about -0.12 of its potential returns per unit of risk. The Wonbang Tech Co is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,240,000 in Wonbang Tech Co on October 30, 2024 and sell it today you would earn a total of 185,000 from holding Wonbang Tech Co or generate 14.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Chemical Co vs. Wonbang Tech Co
Performance |
| Timeline |
| JC Chemical |
| Wonbang Tech |
JC Chemical and Wonbang Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Chemical and Wonbang Tech
The main advantage of trading using opposite JC Chemical and Wonbang Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Chemical position performs unexpectedly, Wonbang Tech 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 Wonbang Tech will offset losses from the drop in Wonbang Tech's long position.| JC Chemical vs. Dgb Financial | JC Chemical vs. Settlebank | JC Chemical vs. Industrial Bank | JC Chemical vs. Lotte Data Communication |
| Wonbang Tech vs. DRB Industrial Co | Wonbang Tech vs. Daesung Industrial Co | Wonbang Tech vs. Hankukpackage Co | Wonbang Tech vs. Daiyang Metal Co |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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