Correlation Between Jinro Distillers and Korea Computer
Can any of the company-specific risk be diversified away by investing in both Jinro Distillers and Korea Computer 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 Korea Computer 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 Korea Computer, you can compare the effects of market volatilities on Jinro Distillers and Korea Computer 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 Korea Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinro Distillers and Korea Computer.
Diversification Opportunities for Jinro Distillers and Korea Computer
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jinro and Korea is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co and Korea Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Computer 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 Korea Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Computer has no effect on the direction of Jinro Distillers i.e., Jinro Distillers and Korea Computer go up and down completely randomly.
Pair Corralation between Jinro Distillers and Korea Computer
Assuming the 90 days trading horizon Jinro Distillers Co is expected to generate 0.16 times more return on investment than Korea Computer. However, Jinro Distillers Co is 6.37 times less risky than Korea Computer. It trades about 0.19 of its potential returns per unit of risk. Korea Computer is currently generating about -0.19 per unit of risk. If you would invest 1,706,000 in Jinro Distillers Co on November 7, 2024 and sell it today you would earn a total of 14,000 from holding Jinro Distillers Co or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Jinro Distillers Co vs. Korea Computer
Performance |
| Timeline |
| Jinro Distillers |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Korea Computer |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Jinro Distillers and Korea Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinro Distillers and Korea Computer
The main advantage of trading using opposite Jinro Distillers and Korea Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinro Distillers position performs unexpectedly, Korea Computer 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 Korea Computer will offset losses from the drop in Korea Computer's long position.| Jinro Distillers vs. Solution Advanced Technology | Jinro Distillers vs. Shinhan Inverse WTI | Jinro Distillers vs. ISU Chemical Co |
| Korea Computer vs. Samsung Electronics Co | Korea Computer vs. Hyundai Motor Co | Korea Computer vs. LG Electronics |
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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