Correlation Between Alcor Micro and I Jang

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

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

Diversification Opportunities for Alcor Micro and I Jang

0.46

Correlation Coefficient

Alcor Micro  I Jang

Very weak diversification

The 3 months correlation between Alcor and 8342 is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Alcor Micro 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 Alcor Micro 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 Alcor Micro 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 Alcor Micro i.e., Alcor Micro and I Jang go up and down completely randomly.

Pair Corralation between Alcor Micro and I Jang

Assuming the 90 days trading horizon Alcor Micro is expected to generate 3.82 times more return on investment than I Jang. However, Alcor Micro is 3.82 times more volatile than I Jang Industrial. It trades about 0.01 of its potential returns per unit of risk. I Jang Industrial is currently generating about 0.0 per unit of risk. If you would invest  13,600  in Alcor Micro on October 9, 2024 and sell it today you would lose (100.00) from holding Alcor Micro or give up 0.74% of portfolio value over 90 days.

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

Alcor Micro  vs.  I Jang Industrial

Alcor Micro

Risk-Adjusted Performance

1 of 100

Very Weak

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

I Jang Industrial

Risk-Adjusted Performance

1 of 100

Very 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 Alcor Micro and I Jang

The main advantage of trading using opposite Alcor Micro and I Jang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alcor Micro 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 Alcor Micro 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.