Correlation Between Cipherlab and I Jang

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

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

Diversification Opportunities for Cipherlab and I Jang

0.1

Correlation Coefficient

Cipherlab  I Jang

Average diversification

The 3 months correlation between Cipherlab and 8342 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cipherlab Co 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 Cipherlab 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 Cipherlab Co 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 Cipherlab i.e., Cipherlab and I Jang go up and down completely randomly.

Pair Corralation between Cipherlab and I Jang

Assuming the 90 days trading horizon Cipherlab is expected to generate 1.17 times less return on investment than I Jang. In addition to that, Cipherlab is 1.35 times more volatile than I Jang Industrial. It trades about 0.04 of its total potential returns per unit of risk. I Jang Industrial is currently generating about 0.06 per unit of volatility. If you would invest  5,064  in I Jang Industrial on September 24, 2024 and sell it today you would earn a total of  3,726  from holding I Jang Industrial or generate 73.58% return on investment over 90 days.

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

Cipherlab Co  vs.  I Jang Industrial

Cipherlab

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cipherlab Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

I Jang Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days I Jang Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Cipherlab and I Jang

The main advantage of trading using opposite Cipherlab and I Jang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cipherlab 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 Cipherlab Co 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.