Correlation Between Jeju Bank and Hyundai Glovis
Can any of the company-specific risk be diversified away by investing in both Jeju Bank and Hyundai Glovis 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 Hyundai Glovis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and Hyundai Glovis, you can compare the effects of market volatilities on Jeju Bank and Hyundai Glovis 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 Hyundai Glovis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and Hyundai Glovis.
Diversification Opportunities for Jeju Bank and Hyundai Glovis
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jeju and Hyundai is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and Hyundai Glovis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Glovis 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 Hyundai Glovis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Glovis has no effect on the direction of Jeju Bank i.e., Jeju Bank and Hyundai Glovis go up and down completely randomly.
Pair Corralation between Jeju Bank and Hyundai Glovis
Assuming the 90 days trading horizon Jeju Bank is expected to under-perform the Hyundai Glovis. But the stock apears to be less risky and, when comparing its historical volatility, Jeju Bank is 1.27 times less risky than Hyundai Glovis. The stock trades about -0.17 of its potential returns per unit of risk. The Hyundai Glovis is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 9,180,000 in Hyundai Glovis on September 3, 2024 and sell it today you would earn a total of 3,120,000 from holding Hyundai Glovis or generate 33.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. Hyundai Glovis
Performance |
| Timeline |
| Jeju Bank |
| Hyundai Glovis |
Jeju Bank and Hyundai Glovis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and Hyundai Glovis
The main advantage of trading using opposite Jeju Bank and Hyundai Glovis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank position performs unexpectedly, Hyundai Glovis 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 Hyundai Glovis will offset losses from the drop in Hyundai Glovis' long position.| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Daewoo SBI SPAC | Jeju Bank vs. Dream Security co | Jeju Bank vs. Microfriend |
| Hyundai Glovis vs. Jeju Bank | Hyundai Glovis vs. Pureun Mutual Savings | Hyundai Glovis vs. BNK Financial Group | Hyundai Glovis vs. Incar Financial Service |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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