Correlation Between Pan Jit and Gold Circuit
Can any of the company-specific risk be diversified away by investing in both Pan Jit and Gold Circuit 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 Pan Jit and Gold Circuit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan Jit International and Gold Circuit Electronics, you can compare the effects of market volatilities on Pan Jit and Gold Circuit 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 Pan Jit with a short position of Gold Circuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Jit and Gold Circuit.
Diversification Opportunities for Pan Jit and Gold Circuit
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pan and Gold is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Pan Jit International and Gold Circuit Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Circuit Electronics and Pan Jit 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 Pan Jit International are associated (or correlated) with Gold Circuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Circuit Electronics has no effect on the direction of Pan Jit i.e., Pan Jit and Gold Circuit go up and down completely randomly.
Pair Corralation between Pan Jit and Gold Circuit
Assuming the 90 days trading horizon Pan Jit International is expected to under-perform the Gold Circuit. But the stock apears to be less risky and, when comparing its historical volatility, Pan Jit International is 1.13 times less risky than Gold Circuit. The stock trades about -0.16 of its potential returns per unit of risk. The Gold Circuit Electronics is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 19,700 in Gold Circuit Electronics on September 3, 2024 and sell it today you would lose (1,150) from holding Gold Circuit Electronics or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan Jit International vs. Gold Circuit Electronics
Performance |
| Timeline |
| Pan Jit International |
| Gold Circuit Electronics |
Pan Jit and Gold Circuit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Jit and Gold Circuit
The main advantage of trading using opposite Pan Jit and Gold Circuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Jit position performs unexpectedly, Gold Circuit 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 Gold Circuit will offset losses from the drop in Gold Circuit's long position.| Pan Jit vs. Taiwan Semiconductor Manufacturing | Pan Jit vs. Yang Ming Marine | Pan Jit vs. ASE Industrial Holding | Pan Jit vs. AU Optronics |
| Gold Circuit vs. Compeq Manufacturing Co | Gold Circuit vs. Unitech Printed Circuit | Gold Circuit vs. Unimicron Technology Corp | Gold Circuit vs. WUS Printed Circuit |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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