Correlation Between Display Tech and Jin Air
Can any of the company-specific risk be diversified away by investing in both Display Tech and Jin Air 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 Display Tech and Jin Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Display Tech Co and Jin Air Co, you can compare the effects of market volatilities on Display Tech and Jin Air 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 Display Tech with a short position of Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Display Tech and Jin Air.
Diversification Opportunities for Display Tech and Jin Air
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Display and Jin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Display Tech Co and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air and Display Tech 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 Display Tech Co are associated (or correlated) with Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of Display Tech i.e., Display Tech and Jin Air go up and down completely randomly.
Pair Corralation between Display Tech and Jin Air
Assuming the 90 days trading horizon Display Tech Co is expected to generate 1.18 times more return on investment than Jin Air. However, Display Tech is 1.18 times more volatile than Jin Air Co. It trades about 0.13 of its potential returns per unit of risk. Jin Air Co is currently generating about 0.04 per unit of risk. If you would invest 254,500 in Display Tech Co on December 7, 2024 and sell it today you would earn a total of 37,500 from holding Display Tech Co or generate 14.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Display Tech Co vs. Jin Air Co
Performance |
Timeline |
Display Tech |
Jin Air |
Display Tech and Jin Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Display Tech and Jin Air
The main advantage of trading using opposite Display Tech and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Display Tech position performs unexpectedly, Jin Air 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 Jin Air will offset losses from the drop in Jin Air's long position.Display Tech vs. KG Eco Technology | Display Tech vs. Guyoung Technology Co | Display Tech vs. Woori Technology | Display Tech vs. SungMoon Electronics Co |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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