Correlation Between Jentech Precision and Lungyen Life
Can any of the company-specific risk be diversified away by investing in both Jentech Precision and Lungyen Life 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 Jentech Precision and Lungyen Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jentech Precision Industrial and Lungyen Life Service, you can compare the effects of market volatilities on Jentech Precision and Lungyen Life 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 Jentech Precision with a short position of Lungyen Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jentech Precision and Lungyen Life.
Diversification Opportunities for Jentech Precision and Lungyen Life
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jentech and Lungyen is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Jentech Precision Industrial and Lungyen Life Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lungyen Life Service and Jentech Precision 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 Jentech Precision Industrial are associated (or correlated) with Lungyen Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lungyen Life Service has no effect on the direction of Jentech Precision i.e., Jentech Precision and Lungyen Life go up and down completely randomly.
Pair Corralation between Jentech Precision and Lungyen Life
Assuming the 90 days trading horizon Jentech Precision Industrial is expected to generate 2.09 times more return on investment than Lungyen Life. However, Jentech Precision is 2.09 times more volatile than Lungyen Life Service. It trades about 0.11 of its potential returns per unit of risk. Lungyen Life Service is currently generating about 0.06 per unit of risk. If you would invest 37,650 in Jentech Precision Industrial on September 23, 2024 and sell it today you would earn a total of 104,850 from holding Jentech Precision Industrial or generate 278.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Jentech Precision Industrial vs. Lungyen Life Service
Performance |
Timeline |
Jentech Precision |
Lungyen Life Service |
Jentech Precision and Lungyen Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jentech Precision and Lungyen Life
The main advantage of trading using opposite Jentech Precision and Lungyen Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jentech Precision position performs unexpectedly, Lungyen Life 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 Lungyen Life will offset losses from the drop in Lungyen Life's long position.Jentech Precision vs. Lotes Co | Jentech Precision vs. Nan Ya Printed | Jentech Precision vs. Global Unichip Corp | Jentech Precision vs. Tong Hsing Electronic |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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