Correlation Between Eagon Industrial and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Eagon Industrial 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 Eagon Industrial and Jeju Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagon Industrial Co and Jeju Beer Co, you can compare the effects of market volatilities on Eagon Industrial 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 Eagon Industrial with a short position of Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagon Industrial and Jeju Beer.
Diversification Opportunities for Eagon Industrial and Jeju Beer
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eagon and Jeju is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Eagon Industrial 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 Eagon Industrial 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 Eagon Industrial 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 Eagon Industrial i.e., Eagon Industrial and Jeju Beer go up and down completely randomly.
Pair Corralation between Eagon Industrial and Jeju Beer
Assuming the 90 days trading horizon Eagon Industrial Co is expected to generate 0.45 times more return on investment than Jeju Beer. However, Eagon Industrial Co is 2.21 times less risky than Jeju Beer. It trades about 0.18 of its potential returns per unit of risk. Jeju Beer Co is currently generating about 0.05 per unit of risk. If you would invest 496,269 in Eagon Industrial Co on October 9, 2024 and sell it today you would earn a total of 28,731 from holding Eagon Industrial Co or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagon Industrial Co vs. Jeju Beer Co
Performance |
| Timeline |
| Eagon Industrial |
| Jeju Beer |
Eagon Industrial and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagon Industrial and Jeju Beer
The main advantage of trading using opposite Eagon Industrial and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagon Industrial 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.| Eagon Industrial vs. KG Eco Technology | Eagon Industrial vs. NewFlex Technology Co | Eagon Industrial vs. Koh Young Technology | Eagon Industrial vs. BIT Computer Co |
| Jeju Beer vs. ENERGYMACHINERY KOREA CoLtd | Jeju Beer vs. Nam Hwa Construction | Jeju Beer vs. Dongbang Ship Machinery | Jeju Beer vs. Lotte Chilsung Beverage |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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