Correlation Between Jin Air and PH Tech

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

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

Diversification Opportunities for Jin Air and PH Tech

-0.18

Correlation Coefficient

Jin Air  PH Tech

Good diversification

The 3 months correlation between Jin and 239890 is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and PH Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PH Tech and Jin Air 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 Jin Air Co are associated (or correlated) with PH Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PH Tech has no effect on the direction of Jin Air i.e., Jin Air and PH Tech go up and down completely randomly.

Pair Corralation between Jin Air and PH Tech

Assuming the 90 days trading horizon Jin Air is expected to generate 7.05 times less return on investment than PH Tech. But when comparing it to its historical volatility, Jin Air Co is 1.4 times less risky than PH Tech. It trades about 0.0 of its potential returns per unit of risk. PH Tech Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  824,000  in PH Tech Co on October 9, 2024 and sell it today you would earn a total of  6,000  from holding PH Tech Co or generate 0.73% return on investment over 90 days.

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

Jin Air Co  vs.  PH Tech Co

Jin Air

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jin Air Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jin Air is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PH Tech

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PH Tech Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, PH Tech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jin Air and PH Tech

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

The idea behind Jin Air Co and PH Tech 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.