Correlation Between Access Bio and JNK Heaters
Can any of the company-specific risk be diversified away by investing in both Access Bio and JNK Heaters 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 Access Bio and JNK Heaters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Access Bio and JNK Heaters Co, you can compare the effects of market volatilities on Access Bio and JNK Heaters 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 Access Bio with a short position of JNK Heaters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Access Bio and JNK Heaters.
Diversification Opportunities for Access Bio and JNK Heaters
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Access and JNK is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Access Bio and JNK Heaters Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNK Heaters and Access Bio 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 Access Bio are associated (or correlated) with JNK Heaters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNK Heaters has no effect on the direction of Access Bio i.e., Access Bio and JNK Heaters go up and down completely randomly.
Pair Corralation between Access Bio and JNK Heaters
Assuming the 90 days trading horizon Access Bio is expected to generate 1.78 times more return on investment than JNK Heaters. However, Access Bio is 1.78 times more volatile than JNK Heaters Co. It trades about -0.03 of its potential returns per unit of risk. JNK Heaters Co is currently generating about -0.07 per unit of risk. If you would invest 914,000 in Access Bio on September 14, 2024 and sell it today you would lose (369,000) from holding Access Bio or give up 40.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Access Bio vs. JNK Heaters Co
Performance |
| Timeline |
| Access Bio |
| JNK Heaters |
Access Bio and JNK Heaters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Access Bio and JNK Heaters
The main advantage of trading using opposite Access Bio and JNK Heaters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Access Bio position performs unexpectedly, JNK Heaters 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 JNK Heaters will offset losses from the drop in JNK Heaters' long position.| Access Bio vs. Humasis Co | Access Bio vs. DRGEM | Access Bio vs. Busan Industrial Co | Access Bio vs. Busan Ind |
| JNK Heaters vs. Hanil Chemical Ind | JNK Heaters vs. Korea Petro Chemical | JNK Heaters vs. Hyundai Home Shopping | JNK Heaters vs. Mirai Semiconductors 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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