Correlation Between Jeju Bank and ABOV Semiconductor
Can any of the company-specific risk be diversified away by investing in both Jeju Bank and ABOV Semiconductor 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 ABOV Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and ABOV Semiconductor Co, you can compare the effects of market volatilities on Jeju Bank and ABOV Semiconductor 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 ABOV Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and ABOV Semiconductor.
Diversification Opportunities for Jeju Bank and ABOV Semiconductor
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jeju and ABOV is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and ABOV Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABOV Semiconductor 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 ABOV Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABOV Semiconductor has no effect on the direction of Jeju Bank i.e., Jeju Bank and ABOV Semiconductor go up and down completely randomly.
Pair Corralation between Jeju Bank and ABOV Semiconductor
Assuming the 90 days trading horizon Jeju Bank is expected to generate 0.53 times more return on investment than ABOV Semiconductor. However, Jeju Bank is 1.89 times less risky than ABOV Semiconductor. It trades about -0.12 of its potential returns per unit of risk. ABOV Semiconductor Co is currently generating about -0.1 per unit of risk. If you would invest 1,116,000 in Jeju Bank on September 22, 2024 and sell it today you would lose (336,000) from holding Jeju Bank or give up 30.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. ABOV Semiconductor Co
Performance |
| Timeline |
| Jeju Bank |
| ABOV Semiconductor |
Jeju Bank and ABOV Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and ABOV Semiconductor
The main advantage of trading using opposite Jeju Bank and ABOV Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank position performs unexpectedly, ABOV Semiconductor 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 ABOV Semiconductor will offset losses from the drop in ABOV Semiconductor's long position.| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Wonbang Tech Co | Jeju Bank vs. Busan Industrial Co | Jeju Bank vs. Busan Ind |
| ABOV Semiconductor vs. ChipsMedia | ABOV Semiconductor vs. Jeju Bank | ABOV Semiconductor vs. Tamul Multimedia Co | ABOV Semiconductor vs. SKONEC Entertainment 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 Stocks Directory module to find actively traded stocks across global markets.
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