Correlation Between Samyoung Electronics and Jahwa Electron

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

By analyzing existing cross correlation between Samyoung Electronics Co and Jahwa Electron, you can compare the effects of market volatilities on Samyoung Electronics and Jahwa Electron 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 Samyoung Electronics with a short position of Jahwa Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyoung Electronics and Jahwa Electron.

Diversification Opportunities for Samyoung Electronics and Jahwa Electron

0.82

Correlation Coefficient

Samyoung Electronics  Jahwa Electron

Very poor diversification

The 3 months correlation between Samyoung and Jahwa is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Samyoung Electronics Co and Jahwa Electron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jahwa Electron and Samyoung Electronics 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 Samyoung Electronics Co are associated (or correlated) with Jahwa Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jahwa Electron has no effect on the direction of Samyoung Electronics i.e., Samyoung Electronics and Jahwa Electron go up and down completely randomly.

Pair Corralation between Samyoung Electronics and Jahwa Electron

Assuming the 90 days trading horizon Samyoung Electronics is expected to generate 8.96 times less return on investment than Jahwa Electron. But when comparing it to its historical volatility, Samyoung Electronics Co is 4.09 times less risky than Jahwa Electron. It trades about 0.03 of its potential returns per unit of risk. Jahwa Electron is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,201,000  in Jahwa Electron on December 25, 2024 and sell it today you would earn a total of  130,000  from holding Jahwa Electron or generate 10.82% return on investment over 90 days.

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

Samyoung Electronics Co  vs.  Jahwa Electron

Samyoung Electronics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samyoung Electronics Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Samyoung Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jahwa Electron

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jahwa Electron are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jahwa Electron sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samyoung Electronics and Jahwa Electron

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

The idea behind Samyoung Electronics Co and Jahwa Electron 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.