Correlation Between Jentech Precision and Actron Technology
Can any of the company-specific risk be diversified away by investing in both Jentech Precision and Actron Technology 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 Actron Technology 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 Actron Technology, you can compare the effects of market volatilities on Jentech Precision and Actron Technology 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 Actron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jentech Precision and Actron Technology.
Diversification Opportunities for Jentech Precision and Actron Technology
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jentech and Actron is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Jentech Precision Industrial and Actron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actron Technology 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 Actron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actron Technology has no effect on the direction of Jentech Precision i.e., Jentech Precision and Actron Technology go up and down completely randomly.
Pair Corralation between Jentech Precision and Actron Technology
Assuming the 90 days trading horizon Jentech Precision Industrial is expected to generate 2.39 times more return on investment than Actron Technology. However, Jentech Precision is 2.39 times more volatile than Actron Technology. It trades about 0.03 of its potential returns per unit of risk. Actron Technology is currently generating about -0.1 per unit of risk. If you would invest 149,000 in Jentech Precision Industrial on September 13, 2024 and sell it today you would earn a total of 2,000 from holding Jentech Precision Industrial or generate 1.34% 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. Actron Technology
Performance |
| Timeline |
| Jentech Precision |
| Actron Technology |
Jentech Precision and Actron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jentech Precision and Actron Technology
The main advantage of trading using opposite Jentech Precision and Actron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jentech Precision position performs unexpectedly, Actron Technology 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 Actron Technology will offset losses from the drop in Actron Technology's 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 |
| Actron Technology vs. E Lead Electronic Co | Actron Technology vs. Jentech Precision Industrial | Actron Technology vs. Turvo International Co | Actron Technology vs. Ruentex Development Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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