Correlation Between TWOWAY Communications and I Jang
Can any of the company-specific risk be diversified away by investing in both TWOWAY Communications and I Jang 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 TWOWAY Communications and I Jang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TWOWAY Communications and I Jang Industrial, you can compare the effects of market volatilities on TWOWAY Communications and I Jang 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 TWOWAY Communications with a short position of I Jang. Check out your portfolio center. Please also check ongoing floating volatility patterns of TWOWAY Communications and I Jang.
Diversification Opportunities for TWOWAY Communications and I Jang
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TWOWAY and 8342 is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding TWOWAY Communications and I Jang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Jang Industrial and TWOWAY Communications 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 TWOWAY Communications are associated (or correlated) with I Jang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Jang Industrial has no effect on the direction of TWOWAY Communications i.e., TWOWAY Communications and I Jang go up and down completely randomly.
Pair Corralation between TWOWAY Communications and I Jang
Assuming the 90 days trading horizon TWOWAY Communications is expected to generate 7.22 times more return on investment than I Jang. However, TWOWAY Communications is 7.22 times more volatile than I Jang Industrial. It trades about 0.36 of its potential returns per unit of risk. I Jang Industrial is currently generating about 0.41 per unit of risk. If you would invest 10,200 in TWOWAY Communications on November 8, 2024 and sell it today you would earn a total of 3,250 from holding TWOWAY Communications or generate 31.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.75% |
| Values | Daily Returns |
TWOWAY Communications vs. I Jang Industrial
Performance |
| Timeline |
| TWOWAY Communications |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| I Jang Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
TWOWAY Communications and I Jang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TWOWAY Communications and I Jang
The main advantage of trading using opposite TWOWAY Communications and I Jang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TWOWAY Communications position performs unexpectedly, I Jang 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 I Jang will offset losses from the drop in I Jang's long position.The idea behind TWOWAY Communications and I Jang Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |