Correlation Between JC Chemical and Innometry
Can any of the company-specific risk be diversified away by investing in both JC Chemical and Innometry 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 Innometry 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 Innometry Co, you can compare the effects of market volatilities on JC Chemical and Innometry 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 Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Chemical and Innometry.
Diversification Opportunities for JC Chemical and Innometry
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 137950 and Innometry is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding JC Chemical Co and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry 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 Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of JC Chemical i.e., JC Chemical and Innometry go up and down completely randomly.
Pair Corralation between JC Chemical and Innometry
Assuming the 90 days trading horizon JC Chemical Co is expected to under-perform the Innometry. In addition to that, JC Chemical is 1.71 times more volatile than Innometry Co. It trades about -0.16 of its total potential returns per unit of risk. Innometry Co is currently generating about -0.24 per unit of volatility. If you would invest 912,000 in Innometry Co on September 3, 2024 and sell it today you would lose (110,000) from holding Innometry Co or give up 12.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Chemical Co vs. Innometry Co
Performance |
| Timeline |
| JC Chemical |
| Innometry |
JC Chemical and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Chemical and Innometry
The main advantage of trading using opposite JC Chemical and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Chemical position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.| JC Chemical vs. Busan Industrial Co | JC Chemical vs. UNISEM Co | JC Chemical vs. RPBio Inc | JC Chemical vs. Finebesteel |
| Innometry vs. Daejoo Electronic Materials | Innometry vs. Parksystems Corp | Innometry vs. BH Co | Innometry vs. Partron 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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