Correlation Between Jinro Distillers and DongWon Development
Can any of the company-specific risk be diversified away by investing in both Jinro Distillers and DongWon Development 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 DongWon Development 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 DongWon Development CoLtd, you can compare the effects of market volatilities on Jinro Distillers and DongWon Development 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 DongWon Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinro Distillers and DongWon Development.
Diversification Opportunities for Jinro Distillers and DongWon Development
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jinro and DongWon is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co and DongWon Development CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DongWon Development CoLtd 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 DongWon Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DongWon Development CoLtd has no effect on the direction of Jinro Distillers i.e., Jinro Distillers and DongWon Development go up and down completely randomly.
Pair Corralation between Jinro Distillers and DongWon Development
Assuming the 90 days trading horizon Jinro Distillers Co is expected to generate 0.99 times more return on investment than DongWon Development. However, Jinro Distillers Co is 1.01 times less risky than DongWon Development. It trades about -0.18 of its potential returns per unit of risk. DongWon Development CoLtd is currently generating about -0.32 per unit of risk. If you would invest 1,777,000 in Jinro Distillers Co on September 1, 2024 and sell it today you would lose (75,000) from holding Jinro Distillers Co or give up 4.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jinro Distillers Co vs. DongWon Development CoLtd
Performance |
| Timeline |
| Jinro Distillers |
| DongWon Development CoLtd |
Jinro Distillers and DongWon Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinro Distillers and DongWon Development
The main advantage of trading using opposite Jinro Distillers and DongWon Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinro Distillers position performs unexpectedly, DongWon Development 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 DongWon Development will offset losses from the drop in DongWon Development'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 |
| DongWon Development vs. Busan Industrial Co | DongWon Development vs. Busan Ind | DongWon Development vs. Mirae Asset Daewoo | DongWon Development vs. Finebesteel |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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