Correlation Between I Jang and Asia Tech

Can any of the company-specific risk be diversified away by investing in both I Jang and Asia 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 I Jang and Asia Tech 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 Asia Tech Image, you can compare the effects of market volatilities on I Jang and Asia 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 I Jang with a short position of Asia Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Jang and Asia Tech.

Diversification Opportunities for I Jang and Asia Tech

0.22

Correlation Coefficient

I Jang  Asia Tech

Modest diversification

The 3 months correlation between 8342 and Asia is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding I Jang Industrial and Asia Tech Image in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Tech Image 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 Asia Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Tech Image has no effect on the direction of I Jang i.e., I Jang and Asia Tech go up and down completely randomly.

Pair Corralation between I Jang and Asia Tech

Assuming the 90 days trading horizon I Jang Industrial is expected to under-perform the Asia Tech. But the stock apears to be less risky and, when comparing its historical volatility, I Jang Industrial is 5.06 times less risky than Asia Tech. The stock trades about 0.0 of its potential returns per unit of risk. The Asia Tech Image is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest  9,180  in Asia Tech Image on October 9, 2024 and sell it today you would earn a total of  5,220  from holding Asia Tech Image or generate 56.86% return on investment over 90 days.

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

I Jang Industrial  vs.  Asia Tech Image

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.

Asia Tech Image

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Tech Image are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Asia Tech showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with I Jang and Asia Tech

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

The idea behind I Jang Industrial and Asia Tech Image 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 CEOs Directory module to screen CEOs from public companies around the world.