Correlation Between I Jang and Trade Van

Can any of the company-specific risk be diversified away by investing in both I Jang and Trade Van 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 Trade Van 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 Trade Van Information Services, you can compare the effects of market volatilities on I Jang and Trade Van 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 Trade Van. Check out your portfolio center. Please also check ongoing floating volatility patterns of I Jang and Trade Van.

Diversification Opportunities for I Jang and Trade Van

0.0

Correlation Coefficient

I Jang  Trade Van

Pay attention - limited upside

The 3 months correlation between 8342 and Trade is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding I Jang Industrial and Trade Van Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Van Information 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 Trade Van. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Van Information has no effect on the direction of I Jang i.e., I Jang and Trade Van go up and down completely randomly.

Pair Corralation between I Jang and Trade Van

Assuming the 90 days trading horizon I Jang Industrial is expected to generate 2.74 times more return on investment than Trade Van. However, I Jang is 2.74 times more volatile than Trade Van Information Services. It trades about 0.07 of its potential returns per unit of risk. Trade Van Information Services is currently generating about 0.1 per unit of risk. If you would invest  5,073  in I Jang Industrial on October 9, 2024 and sell it today you would earn a total of  3,877  from holding I Jang Industrial or generate 76.42% return on investment over 90 days.

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

I Jang Industrial  vs.  Trade Van Information Services

I Jang Industrial

Risk-Adjusted Performance

1 of 100

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.

Trade Van Information

Risk-Adjusted Performance

16 of 100

Solid

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

Pair Trading with I Jang and Trade Van

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

The idea behind I Jang Industrial and Trade Van Information Services 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.