Correlation Between PH Tech and Jb Financial
Can any of the company-specific risk be diversified away by investing in both PH Tech and Jb Financial 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 PH Tech and Jb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PH Tech Co and Jb Financial, you can compare the effects of market volatilities on PH Tech and Jb Financial 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 PH Tech with a short position of Jb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PH Tech and Jb Financial.
Diversification Opportunities for PH Tech and Jb Financial
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 239890 and 175330 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PH Tech Co and Jb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jb Financial and PH Tech 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 PH Tech Co are associated (or correlated) with Jb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jb Financial has no effect on the direction of PH Tech i.e., PH Tech and Jb Financial go up and down completely randomly.
Pair Corralation between PH Tech and Jb Financial
Assuming the 90 days trading horizon PH Tech Co is expected to generate 1.7 times more return on investment than Jb Financial. However, PH Tech is 1.7 times more volatile than Jb Financial. It trades about 0.01 of its potential returns per unit of risk. Jb Financial is currently generating about -0.24 per unit of risk. If you would invest 775,000 in PH Tech Co on November 28, 2024 and sell it today you would lose (2,000) from holding PH Tech Co or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PH Tech Co vs. Jb Financial
Performance |
| Timeline |
| PH Tech |
| Jb Financial |
PH Tech and Jb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PH Tech and Jb Financial
The main advantage of trading using opposite PH Tech and Jb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PH Tech position performs unexpectedly, Jb Financial 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 Jb Financial will offset losses from the drop in Jb Financial's long position.| PH Tech vs. Korea Information Communications | PH Tech vs. Kyeryong Construction Industrial | PH Tech vs. Sempio Foods Co | PH Tech vs. PJ Metal Co |
| Jb Financial vs. Hannong Chemicals | Jb Financial vs. Hanil Chemical Ind | Jb Financial vs. Hanyang Digitech Co | Jb Financial vs. Amogreentech 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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