Correlation Between I Jang and SuperAlloy Industrial

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Can any of the company-specific risk be diversified away by investing in both I Jang and SuperAlloy Industrial 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 I Jang and SuperAlloy Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between I Jang Industrial and SuperAlloy Industrial Co,, you can compare the effects of market volatilities on I Jang and SuperAlloy Industrial 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 I Jang with a short position of SuperAlloy Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Jang and SuperAlloy Industrial.

Diversification Opportunities for I Jang and SuperAlloy Industrial

-0.11
  Correlation Coefficient

Good diversification

The 3 months correlation between 8342 and SuperAlloy is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding I Jang Industrial and SuperAlloy Industrial Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SuperAlloy Industrial Co, and I Jang 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 I Jang Industrial are associated (or correlated) with SuperAlloy Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SuperAlloy Industrial Co, has no effect on the direction of I Jang i.e., I Jang and SuperAlloy Industrial go up and down completely randomly.

Pair Corralation between I Jang and SuperAlloy Industrial

Assuming the 90 days trading horizon I Jang is expected to generate 12.15 times less return on investment than SuperAlloy Industrial. But when comparing it to its historical volatility, I Jang Industrial is 3.99 times less risky than SuperAlloy Industrial. It trades about 0.05 of its potential returns per unit of risk. SuperAlloy Industrial Co, is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  5,440  in SuperAlloy Industrial Co, on October 24, 2024 and sell it today you would earn a total of  460.00  from holding SuperAlloy Industrial Co, or generate 8.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

I Jang Industrial  vs.  SuperAlloy Industrial Co,

 Performance 
       Timeline  
I Jang Industrial 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
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.
SuperAlloy Industrial Co, 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in SuperAlloy Industrial Co, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, SuperAlloy Industrial 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 and SuperAlloy Industrial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with I Jang and SuperAlloy Industrial

The main advantage of trading using opposite I Jang and SuperAlloy Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I Jang position performs unexpectedly, SuperAlloy Industrial 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 SuperAlloy Industrial will offset losses from the drop in SuperAlloy Industrial's long position.
The idea behind I Jang Industrial and SuperAlloy Industrial 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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