Correlation Between Dongjin Semichem and Jinro Distillers
Can any of the company-specific risk be diversified away by investing in both Dongjin Semichem and Jinro Distillers 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 Dongjin Semichem and Jinro Distillers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongjin Semichem Co and Jinro Distillers Co, you can compare the effects of market volatilities on Dongjin Semichem and Jinro Distillers 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 Dongjin Semichem with a short position of Jinro Distillers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongjin Semichem and Jinro Distillers.
Diversification Opportunities for Dongjin Semichem and Jinro Distillers
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongjin and Jinro is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dongjin Semichem Co and Jinro Distillers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinro Distillers and Dongjin Semichem 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 Dongjin Semichem Co are associated (or correlated) with Jinro Distillers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinro Distillers has no effect on the direction of Dongjin Semichem i.e., Dongjin Semichem and Jinro Distillers go up and down completely randomly.
Pair Corralation between Dongjin Semichem and Jinro Distillers
Assuming the 90 days trading horizon Dongjin Semichem Co is expected to under-perform the Jinro Distillers. In addition to that, Dongjin Semichem is 3.24 times more volatile than Jinro Distillers Co. It trades about -0.26 of its total potential returns per unit of risk. Jinro Distillers Co is currently generating about -0.18 per unit of volatility. If you would invest 1,777,000 in Jinro Distillers Co on September 1, 2024 and sell it today you would lose (75,000) from holding Jinro Distillers Co or give up 4.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongjin Semichem Co vs. Jinro Distillers Co
Performance |
| Timeline |
| Dongjin Semichem |
| Jinro Distillers |
Dongjin Semichem and Jinro Distillers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongjin Semichem and Jinro Distillers
The main advantage of trading using opposite Dongjin Semichem and Jinro Distillers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongjin Semichem position performs unexpectedly, Jinro Distillers 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 Jinro Distillers will offset losses from the drop in Jinro Distillers' long position.| Dongjin Semichem vs. LG Chemicals | Dongjin Semichem vs. POSCO Holdings | Dongjin Semichem vs. Hanwha Solutions | Dongjin Semichem vs. Hyundai Steel |
| Jinro Distillers vs. LG Display Co | Jinro Distillers vs. Nam Hwa Construction | Jinro Distillers vs. Dongwoo Farm To | Jinro Distillers vs. GS Engineering Construction |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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