Correlation Between Jentech Precision and E Lead
Can any of the company-specific risk be diversified away by investing in both Jentech Precision and E Lead 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 Jentech Precision and E Lead into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jentech Precision Industrial and E Lead Electronic Co, you can compare the effects of market volatilities on Jentech Precision and E Lead 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 Jentech Precision with a short position of E Lead. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jentech Precision and E Lead.
Diversification Opportunities for Jentech Precision and E Lead
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jentech and 2497 is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jentech Precision Industrial and E Lead Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Lead Electronic and Jentech Precision 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 Jentech Precision Industrial are associated (or correlated) with E Lead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Lead Electronic has no effect on the direction of Jentech Precision i.e., Jentech Precision and E Lead go up and down completely randomly.
Pair Corralation between Jentech Precision and E Lead
Assuming the 90 days trading horizon Jentech Precision Industrial is expected to generate 1.55 times more return on investment than E Lead. However, Jentech Precision is 1.55 times more volatile than E Lead Electronic Co. It trades about -0.14 of its potential returns per unit of risk. E Lead Electronic Co is currently generating about -0.31 per unit of risk. If you would invest 147,500 in Jentech Precision Industrial on August 31, 2024 and sell it today you would lose (16,500) from holding Jentech Precision Industrial or give up 11.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jentech Precision Industrial vs. E Lead Electronic Co
Performance |
| Timeline |
| Jentech Precision |
| E Lead Electronic |
Jentech Precision and E Lead Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jentech Precision and E Lead
The main advantage of trading using opposite Jentech Precision and E Lead positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jentech Precision position performs unexpectedly, E Lead 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 E Lead will offset losses from the drop in E Lead's long position.| Jentech Precision vs. United Microelectronics | Jentech Precision vs. Winbond Electronics Corp | Jentech Precision vs. Macronix International Co |
| E Lead vs. Weltrend Semiconductor | E Lead vs. Catcher Technology Co | E Lead vs. Cub Elecparts | E Lead vs. Elan Microelectronics Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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