Correlation Between Jin Air and Vissem Electronics
Can any of the company-specific risk be diversified away by investing in both Jin Air and Vissem 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 Jin Air and Vissem Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jin Air Co and Vissem Electronics Co, you can compare the effects of market volatilities on Jin Air and Vissem 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 Jin Air with a short position of Vissem Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and Vissem Electronics.
Diversification Opportunities for Jin Air and Vissem Electronics
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jin and Vissem is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and Vissem Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vissem Electronics and Jin Air 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 Jin Air Co are associated (or correlated) with Vissem Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vissem Electronics has no effect on the direction of Jin Air i.e., Jin Air and Vissem Electronics go up and down completely randomly.
Pair Corralation between Jin Air and Vissem Electronics
Assuming the 90 days trading horizon Jin Air Co is expected to under-perform the Vissem Electronics. In addition to that, Jin Air is 1.49 times more volatile than Vissem Electronics Co. It trades about -0.08 of its total potential returns per unit of risk. Vissem Electronics Co is currently generating about -0.08 per unit of volatility. If you would invest 397,500 in Vissem Electronics Co on November 6, 2024 and sell it today you would lose (35,500) from holding Vissem Electronics Co or give up 8.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jin Air Co vs. Vissem Electronics Co
Performance |
| Timeline |
| Jin Air |
| Vissem Electronics |
Jin Air and Vissem Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and Vissem Electronics
The main advantage of trading using opposite Jin Air and Vissem Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, Vissem 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 Vissem Electronics will offset losses from the drop in Vissem Electronics' long position.| Jin Air vs. Seers Technology | Jin Air vs. SK Chemicals Co | Jin Air vs. Ilji Technology Co | Jin Air vs. Guyoung Technology Co |
| Vissem Electronics vs. GS Engineering Construction | Vissem Electronics vs. Hanshin Construction Co | Vissem Electronics vs. Hanjoo Light Metal | Vissem Electronics vs. Daewoo Engineering Construction |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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