Correlation Between Taeyang Metal and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and Jeju Beer 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 Taeyang Metal and Jeju Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taeyang Metal Industrial and Jeju Beer Co, you can compare the effects of market volatilities on Taeyang Metal and Jeju Beer 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 Taeyang Metal with a short position of Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and Jeju Beer.
Diversification Opportunities for Taeyang Metal and Jeju Beer
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Taeyang and Jeju is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer and Taeyang Metal 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 Taeyang Metal Industrial are associated (or correlated) with Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and Jeju Beer go up and down completely randomly.
Pair Corralation between Taeyang Metal and Jeju Beer
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to under-perform the Jeju Beer. But the stock apears to be less risky and, when comparing its historical volatility, Taeyang Metal Industrial is 1.07 times less risky than Jeju Beer. The stock trades about -0.31 of its potential returns per unit of risk. The Jeju Beer Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 290,000 in Jeju Beer Co on September 3, 2024 and sell it today you would earn a total of 35,000 from holding Jeju Beer Co or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. Jeju Beer Co
Performance |
| Timeline |
| Taeyang Metal Industrial |
| Jeju Beer |
Taeyang Metal and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and Jeju Beer
The main advantage of trading using opposite Taeyang Metal and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer's long position.| Taeyang Metal vs. AptaBio Therapeutics | Taeyang Metal vs. Daewoo SBI SPAC | Taeyang Metal vs. Dream Security co | Taeyang Metal vs. Microfriend |
| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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