Correlation Between Jinro Distillers and HMM
Can any of the company-specific risk be diversified away by investing in both Jinro Distillers and HMM 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 Jinro Distillers and HMM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jinro Distillers Co and HMM Co, you can compare the effects of market volatilities on Jinro Distillers and HMM 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 Jinro Distillers with a short position of HMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinro Distillers and HMM.
Diversification Opportunities for Jinro Distillers and HMM
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jinro and HMM is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co and HMM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMM Co and Jinro Distillers 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 Jinro Distillers Co are associated (or correlated) with HMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMM Co has no effect on the direction of Jinro Distillers i.e., Jinro Distillers and HMM go up and down completely randomly.
Pair Corralation between Jinro Distillers and HMM
Assuming the 90 days trading horizon Jinro Distillers is expected to generate 2.15 times less return on investment than HMM. But when comparing it to its historical volatility, Jinro Distillers Co is 3.82 times less risky than HMM. It trades about 0.05 of its potential returns per unit of risk. HMM Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,614,499 in HMM Co on September 1, 2024 and sell it today you would earn a total of 181,501 from holding HMM Co or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinro Distillers Co vs. HMM Co
Performance |
| Timeline |
| Jinro Distillers |
| HMM Co |
Jinro Distillers and HMM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinro Distillers and HMM
The main advantage of trading using opposite Jinro Distillers and HMM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinro Distillers position performs unexpectedly, HMM 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 HMM will offset losses from the drop in HMM's long position.| Jinro Distillers vs. LG Display Co | Jinro Distillers vs. Nam Hwa Construction | Jinro Distillers vs. Dongwoo Farm To | Jinro Distillers vs. GS Engineering Construction |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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