Correlation Between Jinro Distillers and Dongbang Ship
Can any of the company-specific risk be diversified away by investing in both Jinro Distillers and Dongbang Ship 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 Dongbang Ship 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 Dongbang Ship Machinery, you can compare the effects of market volatilities on Jinro Distillers and Dongbang Ship 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 Dongbang Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinro Distillers and Dongbang Ship.
Diversification Opportunities for Jinro Distillers and Dongbang Ship
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jinro and Dongbang is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co and Dongbang Ship Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Ship Machinery 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 Dongbang Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Ship Machinery has no effect on the direction of Jinro Distillers i.e., Jinro Distillers and Dongbang Ship go up and down completely randomly.
Pair Corralation between Jinro Distillers and Dongbang Ship
Assuming the 90 days trading horizon Jinro Distillers Co is expected to under-perform the Dongbang Ship. But the stock apears to be less risky and, when comparing its historical volatility, Jinro Distillers Co is 3.44 times less risky than Dongbang Ship. The stock trades about -0.03 of its potential returns per unit of risk. The Dongbang Ship Machinery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 320,000 in Dongbang Ship Machinery on November 7, 2024 and sell it today you would earn a total of 8,000 from holding Dongbang Ship Machinery or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinro Distillers Co vs. Dongbang Ship Machinery
Performance |
| Timeline |
| Jinro Distillers |
| Dongbang Ship Machinery |
Jinro Distillers and Dongbang Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinro Distillers and Dongbang Ship
The main advantage of trading using opposite Jinro Distillers and Dongbang Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinro Distillers position performs unexpectedly, Dongbang Ship 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 Dongbang Ship will offset losses from the drop in Dongbang Ship's long position.| Jinro Distillers vs. LG Display Co | Jinro Distillers vs. DB Financial Investment | Jinro Distillers vs. Daol Investment Securities | Jinro Distillers vs. Automobile Pc |
| Dongbang Ship vs. Samsung Card Co | Dongbang Ship vs. EBEST Investment Securities | Dongbang Ship vs. Koh Young Technology | Dongbang Ship vs. Hansol Chemica |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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