Correlation Between Jinro Distillers and Kukil Metal
Can any of the company-specific risk be diversified away by investing in both Jinro Distillers and Kukil Metal 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 Kukil Metal 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 Kukil Metal Co, you can compare the effects of market volatilities on Jinro Distillers and Kukil Metal 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 Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinro Distillers and Kukil Metal.
Diversification Opportunities for Jinro Distillers and Kukil Metal
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jinro and Kukil is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal 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 Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of Jinro Distillers i.e., Jinro Distillers and Kukil Metal go up and down completely randomly.
Pair Corralation between Jinro Distillers and Kukil Metal
Assuming the 90 days trading horizon Jinro Distillers Co is expected to generate 0.27 times more return on investment than Kukil Metal. However, Jinro Distillers Co is 3.72 times less risky than Kukil Metal. It trades about 0.11 of its potential returns per unit of risk. Kukil Metal Co is currently generating about -0.14 per unit of risk. If you would invest 1,710,000 in Jinro Distillers Co on November 9, 2024 and sell it today you would earn a total of 10,000 from holding Jinro Distillers Co or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinro Distillers Co vs. Kukil Metal Co
Performance |
| Timeline |
| Jinro Distillers |
| Kukil Metal |
Jinro Distillers and Kukil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinro Distillers and Kukil Metal
The main advantage of trading using opposite Jinro Distillers and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinro Distillers position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.| Jinro Distillers vs. Jahwa Electronics Co | Jinro Distillers vs. Anam Electronics Co | Jinro Distillers vs. Innowireless Co | Jinro Distillers vs. KyungIn Electronics Co |
| Kukil Metal vs. Keum Kang Steel | Kukil Metal vs. Tplex Co | Kukil Metal vs. PJ Metal Co | Kukil Metal vs. Samhyun Steel Co |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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