Correlation Between Yuan High and Jetwell Computer
Can any of the company-specific risk be diversified away by investing in both Yuan High and Jetwell Computer 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 Yuan High and Jetwell Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuan High Tech Development and Jetwell Computer Co, you can compare the effects of market volatilities on Yuan High and Jetwell Computer 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 Yuan High with a short position of Jetwell Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan High and Jetwell Computer.
Diversification Opportunities for Yuan High and Jetwell Computer
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yuan and Jetwell is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Yuan High Tech Development and Jetwell Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetwell Computer and Yuan High 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 Yuan High Tech Development are associated (or correlated) with Jetwell Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jetwell Computer has no effect on the direction of Yuan High i.e., Yuan High and Jetwell Computer go up and down completely randomly.
Pair Corralation between Yuan High and Jetwell Computer
Assuming the 90 days trading horizon Yuan High is expected to generate 8.68 times less return on investment than Jetwell Computer. But when comparing it to its historical volatility, Yuan High Tech Development is 1.47 times less risky than Jetwell Computer. It trades about 0.04 of its potential returns per unit of risk. Jetwell Computer Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 13,550 in Jetwell Computer Co on September 13, 2024 and sell it today you would earn a total of 2,100 from holding Jetwell Computer Co or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuan High Tech Development vs. Jetwell Computer Co
Performance |
| Timeline |
| Yuan High Tech |
| Jetwell Computer |
Yuan High and Jetwell Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan High and Jetwell Computer
The main advantage of trading using opposite Yuan High and Jetwell Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan High position performs unexpectedly, Jetwell Computer 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 Jetwell Computer will offset losses from the drop in Jetwell Computer's long position.| Yuan High vs. AU Optronics | Yuan High vs. Innolux Corp | Yuan High vs. Ruentex Development Co | Yuan High vs. WiseChip Semiconductor |
| Jetwell Computer vs. Phoenix Silicon International | Jetwell Computer vs. Sports Gear Co | Jetwell Computer vs. Ching Feng Home | Jetwell Computer vs. Chung Lien Transportation |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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