Correlation Between JAPAUL OIL and SECURE ELECTRONIC

Can any of the company-specific risk be diversified away by investing in both JAPAUL OIL and SECURE ELECTRONIC 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 JAPAUL OIL and SECURE ELECTRONIC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between JAPAUL OIL MARITIME and SECURE ELECTRONIC TECHNOLOGY, you can compare the effects of market volatilities on JAPAUL OIL and SECURE ELECTRONIC 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 JAPAUL OIL with a short position of SECURE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAUL OIL and SECURE ELECTRONIC.

Diversification Opportunities for JAPAUL OIL and SECURE ELECTRONIC

0.85

Correlation Coefficient

JAPAUL OIL  SECURE ELECTRONIC

Very poor diversification

The 3 months correlation between JAPAUL and SECURE is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding JAPAUL OIL MARITIME and SECURE ELECTRONIC TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURE ELECTRONIC and JAPAUL OIL 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 JAPAUL OIL MARITIME are associated (or correlated) with SECURE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECURE ELECTRONIC has no effect on the direction of JAPAUL OIL i.e., JAPAUL OIL and SECURE ELECTRONIC go up and down completely randomly.

Pair Corralation between JAPAUL OIL and SECURE ELECTRONIC

Assuming the 90 days trading horizon JAPAUL OIL is expected to generate 1.35 times less return on investment than SECURE ELECTRONIC. But when comparing it to its historical volatility, JAPAUL OIL MARITIME is 1.18 times less risky than SECURE ELECTRONIC. It trades about 0.14 of its potential returns per unit of risk. SECURE ELECTRONIC TECHNOLOGY is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  53.00  in SECURE ELECTRONIC TECHNOLOGY on May 5, 2025 and sell it today you would earn a total of  27.00  from holding SECURE ELECTRONIC TECHNOLOGY or generate 50.94% return on investment over 90 days.

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

JAPAUL OIL MARITIME  vs.  SECURE ELECTRONIC TECHNOLOGY

JAPAUL OIL MARITIME

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JAPAUL OIL MARITIME are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, JAPAUL OIL reported solid returns over the last few months and may actually be approaching a breakup point.

SECURE ELECTRONIC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SECURE ELECTRONIC TECHNOLOGY are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental indicators, SECURE ELECTRONIC demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JAPAUL OIL and SECURE ELECTRONIC

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

The idea behind JAPAUL OIL MARITIME and SECURE ELECTRONIC TECHNOLOGY 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.