Correlation Between I Jang and Wha Yu
Can any of the company-specific risk be diversified away by investing in both I Jang and Wha Yu 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 I Jang and Wha Yu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Jang Industrial and Wha Yu Industrial, you can compare the effects of market volatilities on I Jang and Wha Yu 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 I Jang with a short position of Wha Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Jang and Wha Yu.
Diversification Opportunities for I Jang and Wha Yu
Good diversification
The 3 months correlation between 8342 and Wha is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding I Jang Industrial and Wha Yu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wha Yu Industrial and I Jang 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 I Jang Industrial are associated (or correlated) with Wha Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wha Yu Industrial has no effect on the direction of I Jang i.e., I Jang and Wha Yu go up and down completely randomly.
Pair Corralation between I Jang and Wha Yu
Assuming the 90 days trading horizon I Jang Industrial is expected to generate 0.83 times more return on investment than Wha Yu. However, I Jang Industrial is 1.2 times less risky than Wha Yu. It trades about 0.05 of its potential returns per unit of risk. Wha Yu Industrial is currently generating about -0.01 per unit of risk. If you would invest 7,920 in I Jang Industrial on October 13, 2024 and sell it today you would earn a total of 960.00 from holding I Jang Industrial or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
I Jang Industrial vs. Wha Yu Industrial
Performance |
| Timeline |
| I Jang Industrial |
| Wha Yu Industrial |
I Jang and Wha Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I Jang and Wha Yu
The main advantage of trading using opposite I Jang and Wha Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Jang position performs unexpectedly, Wha Yu 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 Wha Yu will offset losses from the drop in Wha Yu's long position.| I Jang vs. AVerMedia Technologies | I Jang vs. Min Aik Technology | I Jang vs. Uniform Industrial Corp | I Jang vs. Information Technology Total |
| Wha Yu vs. Gemtek Technology Co | Wha Yu vs. Arcadyan Technology Corp | Wha Yu vs. Zinwell | Wha Yu vs. Silitech Technology 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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