Correlation Between First Copper and I Jang

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

By analyzing existing cross correlation between First Copper Technology and I Jang Industrial, you can compare the effects of market volatilities on First Copper and I Jang 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 First Copper with a short position of I Jang. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Copper and I Jang.

Diversification Opportunities for First Copper and I Jang

-0.15

Correlation Coefficient

First Copper  I Jang

Good diversification

The 3 months correlation between First and 8342 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding First Copper Technology and I Jang Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I Jang Industrial and First Copper 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 First Copper Technology are associated (or correlated) with I Jang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I Jang Industrial has no effect on the direction of First Copper i.e., First Copper and I Jang go up and down completely randomly.

Pair Corralation between First Copper and I Jang

Assuming the 90 days trading horizon First Copper is expected to generate 3.28 times less return on investment than I Jang. In addition to that, First Copper is 1.17 times more volatile than I Jang Industrial. It trades about 0.02 of its total potential returns per unit of risk. I Jang Industrial is currently generating about 0.07 per unit of volatility. If you would invest  5,073  in I Jang Industrial on October 13, 2024 and sell it today you would earn a total of  3,807  from holding I Jang Industrial or generate 75.04% return on investment over 90 days.

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

First Copper Technology  vs.  I Jang Industrial

First Copper Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Copper Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

I Jang Industrial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in I Jang Industrial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, I Jang is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with First Copper and I Jang

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

The idea behind First Copper Technology and I Jang Industrial 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .