Correlation Between JUSUNG ENGINEERING and ICD

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

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

Diversification Opportunities for JUSUNG ENGINEERING and ICD

0.77

Correlation Coefficient

JUSUNG ENGINEERING  ICD

Poor diversification

The 3 months correlation between JUSUNG and ICD is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding JUSUNG ENGINEERING Co and ICD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICD Co and JUSUNG ENGINEERING 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 JUSUNG ENGINEERING Co are associated (or correlated) with ICD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICD Co has no effect on the direction of JUSUNG ENGINEERING i.e., JUSUNG ENGINEERING and ICD go up and down completely randomly.

Pair Corralation between JUSUNG ENGINEERING and ICD

Assuming the 90 days trading horizon JUSUNG ENGINEERING is expected to generate 1.01 times less return on investment than ICD. But when comparing it to its historical volatility, JUSUNG ENGINEERING Co is 1.43 times less risky than ICD. It trades about 0.13 of its potential returns per unit of risk. ICD Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  496,000  in ICD Co on November 29, 2024 and sell it today you would earn a total of  117,000  from holding ICD Co or generate 23.59% return on investment over 90 days.

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

JUSUNG ENGINEERING Co  vs.  ICD Co

JUSUNG ENGINEERING

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JUSUNG ENGINEERING Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, JUSUNG ENGINEERING sustained solid returns over the last few months and may actually be approaching a breakup point.

ICD Co

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ICD Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ICD sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JUSUNG ENGINEERING and ICD

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

The idea behind JUSUNG ENGINEERING Co and ICD 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.