Correlation Between Daelim Trading and Jeju Air
Can any of the company-specific risk be diversified away by investing in both Daelim Trading and Jeju Air 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 Daelim Trading and Jeju Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daelim Trading Co and Jeju Air Co, you can compare the effects of market volatilities on Daelim Trading and Jeju Air 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 Daelim Trading with a short position of Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daelim Trading and Jeju Air.
Diversification Opportunities for Daelim Trading and Jeju Air
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daelim and Jeju is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Daelim Trading Co and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air and Daelim Trading 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 Daelim Trading Co are associated (or correlated) with Jeju Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Air has no effect on the direction of Daelim Trading i.e., Daelim Trading and Jeju Air go up and down completely randomly.
Pair Corralation between Daelim Trading and Jeju Air
Assuming the 90 days trading horizon Daelim Trading Co is expected to under-perform the Jeju Air. But the stock apears to be less risky and, when comparing its historical volatility, Daelim Trading Co is 1.02 times less risky than Jeju Air. The stock trades about -0.07 of its potential returns per unit of risk. The Jeju Air Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 900,000 in Jeju Air Co on September 13, 2024 and sell it today you would lose (20,000) from holding Jeju Air Co or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Daelim Trading Co vs. Jeju Air Co
Performance |
| Timeline |
| Daelim Trading |
| Jeju Air |
Daelim Trading and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daelim Trading and Jeju Air
The main advantage of trading using opposite Daelim Trading and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daelim Trading position performs unexpectedly, Jeju Air 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 Jeju Air will offset losses from the drop in Jeju Air's long position.| Daelim Trading vs. Samsung Electronics Co | Daelim Trading vs. Samsung Electronics Co | Daelim Trading vs. SK Hynix | Daelim Trading vs. POSCO Holdings |
| Jeju Air vs. Korea New Network | Jeju Air vs. Solution Advanced Technology | Jeju Air vs. Busan Industrial Co | Jeju Air vs. Busan Ind |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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