Correlation Between Jahwa Electron and Raphas

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

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

Diversification Opportunities for Jahwa Electron and Raphas

-0.08

Correlation Coefficient

Jahwa Electron  Raphas

Good diversification

The 3 months correlation between Jahwa and Raphas is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Jahwa Electron and Raphas Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raphas and Jahwa Electron 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 Jahwa Electron are associated (or correlated) with Raphas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raphas has no effect on the direction of Jahwa Electron i.e., Jahwa Electron and Raphas go up and down completely randomly.

Pair Corralation between Jahwa Electron and Raphas

Assuming the 90 days trading horizon Jahwa Electron is expected to under-perform the Raphas. But the stock apears to be less risky and, when comparing its historical volatility, Jahwa Electron is 1.06 times less risky than Raphas. The stock trades about -0.36 of its potential returns per unit of risk. The Raphas Co is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  1,376,000  in Raphas Co on December 5, 2024 and sell it today you would earn a total of  286,000  from holding Raphas Co or generate 20.78% return on investment over 90 days.

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

Jahwa Electron  vs.  Raphas Co

Jahwa Electron

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jahwa Electron are ranked lower than 6 (%) 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.

Raphas

Risk-Adjusted Performance

Modest

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

Pair Trading with Jahwa Electron and Raphas

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

The idea behind Jahwa Electron and Raphas Co 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 Transaction History module to view history of all your transactions and understand their impact on performance.