Correlation Between Jeju Bank and Seoyon Topmetal
Can any of the company-specific risk be diversified away by investing in both Jeju Bank and Seoyon Topmetal 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 Seoyon Topmetal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and Seoyon Topmetal Co, you can compare the effects of market volatilities on Jeju Bank and Seoyon Topmetal 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 Seoyon Topmetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and Seoyon Topmetal.
Diversification Opportunities for Jeju Bank and Seoyon Topmetal
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jeju and Seoyon is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal 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 Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of Jeju Bank i.e., Jeju Bank and Seoyon Topmetal go up and down completely randomly.
Pair Corralation between Jeju Bank and Seoyon Topmetal
Assuming the 90 days trading horizon Jeju Bank is expected to generate 2.37 times more return on investment than Seoyon Topmetal. However, Jeju Bank is 2.37 times more volatile than Seoyon Topmetal Co. It trades about 0.02 of its potential returns per unit of risk. Seoyon Topmetal Co is currently generating about -0.01 per unit of risk. If you would invest 872,015 in Jeju Bank on September 3, 2024 and sell it today you would lose (79,015) from holding Jeju Bank or give up 9.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. Seoyon Topmetal Co
Performance |
| Timeline |
| Jeju Bank |
| Seoyon Topmetal |
Jeju Bank and Seoyon Topmetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and Seoyon Topmetal
The main advantage of trading using opposite Jeju Bank and Seoyon Topmetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank position performs unexpectedly, Seoyon Topmetal 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 Seoyon Topmetal will offset losses from the drop in Seoyon Topmetal's long position.| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Daewoo SBI SPAC | Jeju Bank vs. Dream Security co | Jeju Bank vs. Microfriend |
| Seoyon Topmetal vs. Korea Real Estate | Seoyon Topmetal vs. Busan Industrial Co | Seoyon Topmetal vs. UNISEM Co | Seoyon Topmetal vs. RPBio Inc |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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