Correlation Between JTL Industries and Asahi Songwon

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

By analyzing existing cross correlation between JTL Industries and Asahi Songwon Colors, you can compare the effects of market volatilities on JTL Industries and Asahi Songwon 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 JTL Industries with a short position of Asahi Songwon. Check out your portfolio center. Please also check ongoing floating volatility patterns of JTL Industries and Asahi Songwon.

Diversification Opportunities for JTL Industries and Asahi Songwon

0.22

Correlation Coefficient

JTL Industries  Asahi Songwon

Modest diversification

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

Pair Corralation between JTL Industries and Asahi Songwon

Assuming the 90 days trading horizon JTL Industries is expected to under-perform the Asahi Songwon. But the stock apears to be less risky and, when comparing its historical volatility, JTL Industries is 1.35 times less risky than Asahi Songwon. The stock trades about -0.08 of its potential returns per unit of risk. The Asahi Songwon Colors is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  35,165  in Asahi Songwon Colors on December 25, 2024 and sell it today you would lose (880.00) from holding Asahi Songwon Colors or give up 2.5% of portfolio value over 90 days.

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

JTL Industries  vs.  Asahi Songwon Colors

JTL Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days JTL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Asahi Songwon Colors

Risk-Adjusted Performance

Weak

Over the last 90 days Asahi Songwon Colors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Asahi Songwon is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with JTL Industries and Asahi Songwon

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

The idea behind JTL Industries and Asahi Songwon Colors 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.