Correlation Between I Jang and Tehmag Foods
Can any of the company-specific risk be diversified away by investing in both I Jang and Tehmag Foods 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 I Jang and Tehmag Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Jang Industrial and Tehmag Foods, you can compare the effects of market volatilities on I Jang and Tehmag Foods 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 I Jang with a short position of Tehmag Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Jang and Tehmag Foods.
Diversification Opportunities for I Jang and Tehmag Foods
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 8342 and Tehmag is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding I Jang Industrial and Tehmag Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tehmag Foods and I Jang 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 I Jang Industrial are associated (or correlated) with Tehmag Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tehmag Foods has no effect on the direction of I Jang i.e., I Jang and Tehmag Foods go up and down completely randomly.
Pair Corralation between I Jang and Tehmag Foods
Assuming the 90 days trading horizon I Jang Industrial is expected to under-perform the Tehmag Foods. In addition to that, I Jang is 2.74 times more volatile than Tehmag Foods. It trades about -0.02 of its total potential returns per unit of risk. Tehmag Foods is currently generating about -0.03 per unit of volatility. If you would invest 31,450 in Tehmag Foods on September 23, 2024 and sell it today you would lose (250.00) from holding Tehmag Foods or give up 0.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
I Jang Industrial vs. Tehmag Foods
Performance |
Timeline |
I Jang Industrial |
Tehmag Foods |
I Jang and Tehmag Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with I Jang and Tehmag Foods
The main advantage of trading using opposite I Jang and Tehmag Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Jang position performs unexpectedly, Tehmag Foods 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 Tehmag Foods will offset losses from the drop in Tehmag Foods' long position.I Jang vs. Castles Technology Co | I Jang vs. Gold Rain Enterprises | I Jang vs. Cipherlab Co | I Jang vs. Accton Technology Corp |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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