Correlation Between JC Chemical and Ray
Can any of the company-specific risk be diversified away by investing in both JC Chemical and Ray 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 Ray 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 Ray Co, you can compare the effects of market volatilities on JC Chemical and Ray 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 Ray. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Chemical and Ray.
Diversification Opportunities for JC Chemical and Ray
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 137950 and Ray is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding JC Chemical Co and Ray Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ray Co 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 Ray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ray Co has no effect on the direction of JC Chemical i.e., JC Chemical and Ray go up and down completely randomly.
Pair Corralation between JC Chemical and Ray
Assuming the 90 days trading horizon JC Chemical Co is expected to generate 0.72 times more return on investment than Ray. However, JC Chemical Co is 1.39 times less risky than Ray. It trades about -0.08 of its potential returns per unit of risk. Ray Co is currently generating about -0.12 per unit of risk. If you would invest 711,532 in JC Chemical Co on September 4, 2024 and sell it today you would lose (321,532) from holding JC Chemical Co or give up 45.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Chemical Co vs. Ray Co
Performance |
| Timeline |
| JC Chemical |
| Ray Co |
JC Chemical and Ray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Chemical and Ray
The main advantage of trading using opposite JC Chemical and Ray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Chemical position performs unexpectedly, Ray 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 Ray will offset losses from the drop in Ray's long position.| JC Chemical vs. Amogreentech Co | JC Chemical vs. Sangshin Electronics Co | JC Chemical vs. Samyang Foods Co | JC Chemical vs. Hwangkum Steel Technology |
| Ray vs. Taeyang Metal Industrial | Ray vs. Eugene Technology CoLtd | Ray vs. Daejung Chemicals Metals | Ray vs. Dong A Steel Technology |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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