Correlation Between Jeju Bank and PanGen Biotech
Can any of the company-specific risk be diversified away by investing in both Jeju Bank and PanGen Biotech 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 PanGen Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Bank and PanGen Biotech, you can compare the effects of market volatilities on Jeju Bank and PanGen Biotech 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 PanGen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and PanGen Biotech.
Diversification Opportunities for Jeju Bank and PanGen Biotech
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jeju and PanGen is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and PanGen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PanGen Biotech 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 PanGen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PanGen Biotech has no effect on the direction of Jeju Bank i.e., Jeju Bank and PanGen Biotech go up and down completely randomly.
Pair Corralation between Jeju Bank and PanGen Biotech
Assuming the 90 days trading horizon Jeju Bank is expected to generate 0.61 times more return on investment than PanGen Biotech. However, Jeju Bank is 1.64 times less risky than PanGen Biotech. It trades about -0.06 of its potential returns per unit of risk. PanGen Biotech is currently generating about -0.16 per unit of risk. If you would invest 801,000 in Jeju Bank on September 13, 2024 and sell it today you would lose (37,000) from holding Jeju Bank or give up 4.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Bank vs. PanGen Biotech
Performance |
| Timeline |
| Jeju Bank |
| PanGen Biotech |
Jeju Bank and PanGen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Bank and PanGen Biotech
The main advantage of trading using opposite Jeju Bank and PanGen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank position performs unexpectedly, PanGen Biotech 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 PanGen Biotech will offset losses from the drop in PanGen Biotech's long position.| Jeju Bank vs. Samsung Electronics Co | Jeju Bank vs. Samsung Electronics Co | Jeju Bank vs. SK Hynix | Jeju Bank vs. POSCO Holdings |
| PanGen Biotech vs. Samhyun Steel Co | PanGen Biotech vs. Samsung Life Insurance | PanGen Biotech vs. Jeil Steel Mfg | PanGen Biotech vs. Innowireless 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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