Correlation Between Jeju Bank and GS Retail
Can any of the company-specific risk be diversified away by investing in both Jeju Bank and GS Retail 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 GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and GS Retail Co, you can compare the effects of market volatilities on Jeju Bank and GS Retail 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 GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and GS Retail.
Diversification Opportunities for Jeju Bank and GS Retail
Modest diversification
The 3 months correlation between Jeju and 007070 is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail 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 GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Jeju Bank i.e., Jeju Bank and GS Retail go up and down completely randomly.
Pair Corralation between Jeju Bank and GS Retail
Assuming the 90 days trading horizon Jeju Bank is expected to under-perform the GS Retail. In addition to that, Jeju Bank is 2.47 times more volatile than GS Retail Co. It trades about -0.02 of its total potential returns per unit of risk. GS Retail Co is currently generating about -0.02 per unit of volatility. If you would invest 2,739,803 in GS Retail Co on August 27, 2024 and sell it today you would lose (479,803) from holding GS Retail Co or give up 17.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. GS Retail Co
Performance |
| Timeline |
| Jeju Bank |
| GS Retail |
Jeju Bank and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and GS Retail
The main advantage of trading using opposite Jeju Bank and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Daewoo SBI SPAC | Jeju Bank vs. Dream Security co | Jeju Bank vs. Microfriend |
| GS Retail vs. AptaBio Therapeutics | GS Retail vs. Daewoo SBI SPAC | GS Retail vs. Dream Security co | GS Retail 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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