Correlation Between JSL Construction and Huaku Development
Can any of the company-specific risk be diversified away by investing in both JSL Construction and Huaku Development 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 JSL Construction and Huaku Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JSL Construction Development and Huaku Development Co, you can compare the effects of market volatilities on JSL Construction and Huaku Development 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 JSL Construction with a short position of Huaku Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSL Construction and Huaku Development.
Diversification Opportunities for JSL Construction and Huaku Development
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JSL and Huaku is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding JSL Construction Development and Huaku Development Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaku Development and JSL Construction 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 JSL Construction Development are associated (or correlated) with Huaku Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaku Development has no effect on the direction of JSL Construction i.e., JSL Construction and Huaku Development go up and down completely randomly.
Pair Corralation between JSL Construction and Huaku Development
Assuming the 90 days trading horizon JSL Construction Development is expected to under-perform the Huaku Development. In addition to that, JSL Construction is 1.06 times more volatile than Huaku Development Co. It trades about -0.15 of its total potential returns per unit of risk. Huaku Development Co is currently generating about -0.06 per unit of volatility. If you would invest 12,750 in Huaku Development Co on September 12, 2024 and sell it today you would lose (650.00) from holding Huaku Development Co or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JSL Construction Development vs. Huaku Development Co
Performance |
| Timeline |
| JSL Construction Dev |
| Huaku Development |
JSL Construction and Huaku Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JSL Construction and Huaku Development
The main advantage of trading using opposite JSL Construction and Huaku Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JSL Construction position performs unexpectedly, Huaku Development 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 Huaku Development will offset losses from the drop in Huaku Development's long position.| JSL Construction vs. Chong Hong Construction | JSL Construction vs. Ruentex Development Co | JSL Construction vs. Symtek Automation Asia | JSL Construction vs. WiseChip Semiconductor |
| Huaku Development vs. Chong Hong Construction | Huaku Development vs. Ruentex Development Co | Huaku Development vs. Symtek Automation Asia | Huaku Development vs. WiseChip Semiconductor |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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