Correlation Between Jentech Precision and Alchip Technologies
Can any of the company-specific risk be diversified away by investing in both Jentech Precision and Alchip Technologies 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 Alchip Technologies 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 Alchip Technologies, you can compare the effects of market volatilities on Jentech Precision and Alchip Technologies 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 Alchip Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jentech Precision and Alchip Technologies.
Diversification Opportunities for Jentech Precision and Alchip Technologies
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jentech and Alchip is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jentech Precision Industrial and Alchip Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alchip Technologies 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 Alchip Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alchip Technologies has no effect on the direction of Jentech Precision i.e., Jentech Precision and Alchip Technologies go up and down completely randomly.
Pair Corralation between Jentech Precision and Alchip Technologies
Assuming the 90 days trading horizon Jentech Precision Industrial is expected to under-perform the Alchip Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Jentech Precision Industrial is 1.03 times less risky than Alchip Technologies. The stock trades about -0.09 of its potential returns per unit of risk. The Alchip Technologies is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 190,000 in Alchip Technologies on August 30, 2024 and sell it today you would earn a total of 26,000 from holding Alchip Technologies or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jentech Precision Industrial vs. Alchip Technologies
Performance |
| Timeline |
| Jentech Precision |
| Alchip Technologies |
Jentech Precision and Alchip Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jentech Precision and Alchip Technologies
The main advantage of trading using opposite Jentech Precision and Alchip Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jentech Precision position performs unexpectedly, Alchip Technologies 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 Alchip Technologies will offset losses from the drop in Alchip Technologies' long position.| Jentech Precision vs. Lotes Co | Jentech Precision vs. Nan Ya Printed | Jentech Precision vs. Global Unichip Corp | Jentech Precision vs. Tong Hsing Electronic |
| Alchip Technologies vs. Taiwan Semiconductor Manufacturing | Alchip Technologies vs. MediaTek | Alchip Technologies vs. United Microelectronics | Alchip Technologies vs. Novatek 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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