Correlation Between Jeju Bank and Korea Air
Can any of the company-specific risk be diversified away by investing in both Jeju Bank and Korea Air 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 Jeju Bank and Korea Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and Korea Air Svc, you can compare the effects of market volatilities on Jeju Bank and Korea Air 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 Jeju Bank with a short position of Korea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and Korea Air.
Diversification Opportunities for Jeju Bank and Korea Air
Very good diversification
The 3 months correlation between Jeju and Korea is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and Korea Air Svc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Air Svc and Jeju Bank 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 Jeju Bank are associated (or correlated) with Korea Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Air Svc has no effect on the direction of Jeju Bank i.e., Jeju Bank and Korea Air go up and down completely randomly.
Pair Corralation between Jeju Bank and Korea Air
Assuming the 90 days trading horizon Jeju Bank is expected to under-perform the Korea Air. But the stock apears to be less risky and, when comparing its historical volatility, Jeju Bank is 1.77 times less risky than Korea Air. The stock trades about -0.23 of its potential returns per unit of risk. The Korea Air Svc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 5,670,000 in Korea Air Svc on September 3, 2024 and sell it today you would lose (100,000) from holding Korea Air Svc or give up 1.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. Korea Air Svc
Performance |
| Timeline |
| Jeju Bank |
| Korea Air Svc |
Jeju Bank and Korea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and Korea Air
The main advantage of trading using opposite Jeju Bank and Korea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank position performs unexpectedly, Korea Air 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 Korea Air will offset losses from the drop in Korea Air's long position.| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Daewoo SBI SPAC | Jeju Bank vs. Dream Security co | Jeju Bank vs. Microfriend |
| Korea Air vs. Incar Financial Service | Korea Air vs. Jeju Bank | Korea Air vs. DB Financial Investment | Korea Air vs. Wireless Power Amplifier |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |