Correlation Between Ambassador Hotel and Joinsoon Electronics
Can any of the company-specific risk be diversified away by investing in both Ambassador Hotel and Joinsoon Electronics 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 Ambassador Hotel and Joinsoon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambassador Hotel and Joinsoon Electronics MFG, you can compare the effects of market volatilities on Ambassador Hotel and Joinsoon Electronics 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 Ambassador Hotel with a short position of Joinsoon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambassador Hotel and Joinsoon Electronics.
Diversification Opportunities for Ambassador Hotel and Joinsoon Electronics
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ambassador and Joinsoon is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ambassador Hotel and Joinsoon Electronics MFG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joinsoon Electronics MFG and Ambassador Hotel 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 Ambassador Hotel are associated (or correlated) with Joinsoon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joinsoon Electronics MFG has no effect on the direction of Ambassador Hotel i.e., Ambassador Hotel and Joinsoon Electronics go up and down completely randomly.
Pair Corralation between Ambassador Hotel and Joinsoon Electronics
Assuming the 90 days trading horizon Ambassador Hotel is expected to generate 0.73 times more return on investment than Joinsoon Electronics. However, Ambassador Hotel is 1.37 times less risky than Joinsoon Electronics. It trades about -0.08 of its potential returns per unit of risk. Joinsoon Electronics MFG is currently generating about -0.07 per unit of risk. If you would invest 6,910 in Ambassador Hotel on September 3, 2024 and sell it today you would lose (1,260) from holding Ambassador Hotel or give up 18.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambassador Hotel vs. Joinsoon Electronics MFG
Performance |
| Timeline |
| Ambassador Hotel |
| Joinsoon Electronics MFG |
Ambassador Hotel and Joinsoon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambassador Hotel and Joinsoon Electronics
The main advantage of trading using opposite Ambassador Hotel and Joinsoon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambassador Hotel position performs unexpectedly, Joinsoon Electronics 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 Joinsoon Electronics will offset losses from the drop in Joinsoon Electronics' long position.| Ambassador Hotel vs. Tainan Spinning Co | Ambassador Hotel vs. Chia Her Industrial | Ambassador Hotel vs. WiseChip Semiconductor | Ambassador Hotel vs. Novatek Microelectronics Corp |
| Joinsoon Electronics vs. Ambassador Hotel | Joinsoon Electronics vs. Tex Ray Industrial Co | Joinsoon Electronics vs. Galaxy Software Services | Joinsoon Electronics vs. Hotel Holiday Garden |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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