Correlation Between GS Retail and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both GS Retail and Jeju Beer 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 GS Retail and Jeju Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Retail Co and Jeju Beer Co, you can compare the effects of market volatilities on GS Retail and Jeju Beer 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 GS Retail with a short position of Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and Jeju Beer.
Diversification Opportunities for GS Retail and Jeju Beer
Pay attention - limited upside
The 3 months correlation between 007070 and Jeju is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer and GS Retail 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 GS Retail Co are associated (or correlated) with Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of GS Retail i.e., GS Retail and Jeju Beer go up and down completely randomly.
Pair Corralation between GS Retail and Jeju Beer
Assuming the 90 days trading horizon GS Retail is expected to generate 1.61 times less return on investment than Jeju Beer. But when comparing it to its historical volatility, GS Retail Co is 2.28 times less risky than Jeju Beer. It trades about 0.05 of its potential returns per unit of risk. Jeju Beer Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 311,500 in Jeju Beer Co on September 3, 2024 and sell it today you would earn a total of 13,500 from holding Jeju Beer Co or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.61% |
| Values | Daily Returns |
GS Retail Co vs. Jeju Beer Co
Performance |
| Timeline |
| GS Retail |
| Jeju Beer |
GS Retail and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Retail and Jeju Beer
The main advantage of trading using opposite GS Retail and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Retail position performs unexpectedly, Jeju Beer 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 Beer will offset losses from the drop in Jeju Beer's long position.| GS Retail vs. CU Medical Systems | GS Retail vs. Daejung Chemicals Metals | GS Retail vs. Alton Sports CoLtd | GS Retail vs. Hannong Chemicals |
| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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