Correlation Between Jeju Bank and Wonil Special
Can any of the company-specific risk be diversified away by investing in both Jeju Bank and Wonil Special 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 Wonil Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and Wonil Special Steel, you can compare the effects of market volatilities on Jeju Bank and Wonil Special 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 Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and Wonil Special.
Diversification Opportunities for Jeju Bank and Wonil Special
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jeju and Wonil is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and Wonil Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonil Special Steel 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 Wonil Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonil Special Steel has no effect on the direction of Jeju Bank i.e., Jeju Bank and Wonil Special go up and down completely randomly.
Pair Corralation between Jeju Bank and Wonil Special
Assuming the 90 days trading horizon Jeju Bank is expected to generate 0.92 times more return on investment than Wonil Special. However, Jeju Bank is 1.09 times less risky than Wonil Special. It trades about 0.42 of its potential returns per unit of risk. Wonil Special Steel is currently generating about -0.06 per unit of risk. If you would invest 795,000 in Jeju Bank on November 27, 2024 and sell it today you would earn a total of 34,000 from holding Jeju Bank or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. Wonil Special Steel
Performance |
| Timeline |
| Jeju Bank |
| Wonil Special Steel |
Jeju Bank and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and Wonil Special
The main advantage of trading using opposite Jeju Bank and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank position performs unexpectedly, Wonil Special 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 Wonil Special will offset losses from the drop in Wonil Special's long position.| Jeju Bank vs. Jin Air Co | Jeju Bank vs. ITM Semiconductor Co | Jeju Bank vs. Mirai Semiconductors Co | Jeju Bank vs. Barunson Entertainment Arts |
| Wonil Special vs. Tuksu Engineering ConstructionLtd | Wonil Special vs. Dongbang Ship Machinery | Wonil Special vs. Shinhan Inverse Silver | Wonil Special vs. INSUN Environmental New |
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.
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