Correlation Between China Times and Jetwell Computer
Can any of the company-specific risk be diversified away by investing in both China Times 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 China Times and Jetwell Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Times Publishing and Jetwell Computer Co, you can compare the effects of market volatilities on China Times 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 China Times with a short position of Jetwell Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Times and Jetwell Computer.
Diversification Opportunities for China Times and Jetwell Computer
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Jetwell is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding China Times Publishing and Jetwell Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jetwell Computer and China Times 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 China Times Publishing 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 China Times i.e., China Times and Jetwell Computer go up and down completely randomly.
Pair Corralation between China Times and Jetwell Computer
Assuming the 90 days trading horizon China Times Publishing is expected to generate 1.83 times more return on investment than Jetwell Computer. However, China Times is 1.83 times more volatile than Jetwell Computer Co. It trades about 0.0 of its potential returns per unit of risk. Jetwell Computer Co is currently generating about -0.12 per unit of risk. If you would invest 1,915 in China Times Publishing on August 30, 2024 and sell it today you would lose (60.00) from holding China Times Publishing or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
China Times Publishing vs. Jetwell Computer Co
Performance |
| Timeline |
| China Times Publishing |
| Jetwell Computer |
China Times and Jetwell Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Times and Jetwell Computer
The main advantage of trading using opposite China Times and Jetwell Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Times 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.| China Times vs. YuantaP shares Taiwan Electronics | China Times vs. YuantaP shares Taiwan Top | China Times vs. YuantaP shares Taiwan Mid Cap | China Times vs. Fubon MSCI Taiwan |
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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 Stocks Directory module to find actively traded stocks across global markets.
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