Correlation Between Heungkuk Metaltech and Jb Financial

Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Jb Financial 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 Heungkuk Metaltech and Jb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Heungkuk Metaltech CoLtd and Jb Financial, you can compare the effects of market volatilities on Heungkuk Metaltech and Jb Financial 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 Heungkuk Metaltech with a short position of Jb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Jb Financial.

Diversification Opportunities for Heungkuk Metaltech and Jb Financial

0.01

Correlation Coefficient

Heungkuk Metaltech  Jb Financial

Significant diversification

The 3 months correlation between Heungkuk and 175330 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Jb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jb Financial and Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd are associated (or correlated) with Jb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jb Financial has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Jb Financial go up and down completely randomly.

Pair Corralation between Heungkuk Metaltech and Jb Financial

Assuming the 90 days trading horizon Heungkuk Metaltech is expected to generate 1.26 times less return on investment than Jb Financial. But when comparing it to its historical volatility, Heungkuk Metaltech CoLtd is 1.15 times less risky than Jb Financial. It trades about 0.08 of its potential returns per unit of risk. Jb Financial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,484,950  in Jb Financial on September 22, 2024 and sell it today you would earn a total of  164,050  from holding Jb Financial or generate 11.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Heungkuk Metaltech CoLtd  vs.  Jb Financial

Heungkuk Metaltech CoLtd

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Heungkuk Metaltech CoLtd are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Heungkuk Metaltech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jb Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jb Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jb Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Heungkuk Metaltech and Jb Financial

The main advantage of trading using opposite Heungkuk Metaltech and Jb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Jb Financial 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 Jb Financial will offset losses from the drop in Jb Financial's long position.

The idea behind Heungkuk Metaltech CoLtd and Jb Financial 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.