Correlation Between Jonjee Hi and Metallurgical

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

By analyzing existing cross correlation between Jonjee Hi tech Industrial and Metallurgical of, you can compare the effects of market volatilities on Jonjee Hi and Metallurgical 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 Jonjee Hi with a short position of Metallurgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jonjee Hi and Metallurgical.

Diversification Opportunities for Jonjee Hi and Metallurgical

0.94

Correlation Coefficient

Jonjee Hi  Metallurgical

Almost no diversification

The 3 months correlation between Jonjee and Metallurgical is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Jonjee Hi tech Industrial and Metallurgical of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metallurgical and Jonjee Hi 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 Jonjee Hi tech Industrial are associated (or correlated) with Metallurgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metallurgical has no effect on the direction of Jonjee Hi i.e., Jonjee Hi and Metallurgical go up and down completely randomly.

Pair Corralation between Jonjee Hi and Metallurgical

Assuming the 90 days trading horizon Jonjee Hi tech Industrial is expected to under-perform the Metallurgical. In addition to that, Jonjee Hi is 1.21 times more volatile than Metallurgical of. It trades about 0.0 of its total potential returns per unit of risk. Metallurgical of is currently generating about 0.04 per unit of volatility. If you would invest  308.00  in Metallurgical of on September 15, 2024 and sell it today you would earn a total of  28.00  from holding Metallurgical of or generate 9.09% return on investment over 90 days.

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

Jonjee Hi tech Industrial  vs.  Metallurgical of

Jonjee Hi tech

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jonjee Hi tech Industrial are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jonjee Hi sustained solid returns over the last few months and may actually be approaching a breakup point.

Metallurgical

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Metallurgical of are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Metallurgical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jonjee Hi and Metallurgical

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

The idea behind Jonjee Hi tech Industrial and Metallurgical of 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.