Correlation Between Jeju Bank and Pureun Mutual
Can any of the company-specific risk be diversified away by investing in both Jeju Bank and Pureun Mutual 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 Pureun Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and Pureun Mutual Savings, you can compare the effects of market volatilities on Jeju Bank and Pureun Mutual 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 Pureun Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and Pureun Mutual.
Diversification Opportunities for Jeju Bank and Pureun Mutual
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jeju and Pureun is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and Pureun Mutual Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pureun Mutual Savings 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 Pureun Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pureun Mutual Savings has no effect on the direction of Jeju Bank i.e., Jeju Bank and Pureun Mutual go up and down completely randomly.
Pair Corralation between Jeju Bank and Pureun Mutual
Assuming the 90 days trading horizon Jeju Bank is expected to generate 4.6 times more return on investment than Pureun Mutual. However, Jeju Bank is 4.6 times more volatile than Pureun Mutual Savings. It trades about 0.09 of its potential returns per unit of risk. Pureun Mutual Savings is currently generating about -0.04 per unit of risk. If you would invest 782,000 in Jeju Bank on October 23, 2024 and sell it today you would earn a total of 29,000 from holding Jeju Bank or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. Pureun Mutual Savings
Performance |
| Timeline |
| Jeju Bank |
| Pureun Mutual Savings |
Jeju Bank and Pureun Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and Pureun Mutual
The main advantage of trading using opposite Jeju Bank and Pureun Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank position performs unexpectedly, Pureun Mutual 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 Pureun Mutual will offset losses from the drop in Pureun Mutual's long position.| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Daewoo SBI SPAC | Jeju Bank vs. Dream Security co | Jeju Bank vs. Microfriend |
| Pureun Mutual vs. PJ Metal Co | Pureun Mutual vs. Aprogen Healthcare Games | Pureun Mutual vs. Dongil Metal Co | Pureun Mutual vs. Namhwa Industrial Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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