Correlation Between Jinro Distillers and Daejung Chemicals
Can any of the company-specific risk be diversified away by investing in both Jinro Distillers and Daejung Chemicals 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 Daejung Chemicals 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 Daejung Chemicals Metals, you can compare the effects of market volatilities on Jinro Distillers and Daejung Chemicals 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 Daejung Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinro Distillers and Daejung Chemicals.
Diversification Opportunities for Jinro Distillers and Daejung Chemicals
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jinro and Daejung is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co and Daejung Chemicals Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejung Chemicals Metals 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 Daejung Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejung Chemicals Metals has no effect on the direction of Jinro Distillers i.e., Jinro Distillers and Daejung Chemicals go up and down completely randomly.
Pair Corralation between Jinro Distillers and Daejung Chemicals
Assuming the 90 days trading horizon Jinro Distillers Co is expected to generate 0.47 times more return on investment than Daejung Chemicals. However, Jinro Distillers Co is 2.13 times less risky than Daejung Chemicals. It trades about -0.04 of its potential returns per unit of risk. Daejung Chemicals Metals is currently generating about -0.02 per unit of risk. If you would invest 2,098,571 in Jinro Distillers Co on September 3, 2024 and sell it today you would lose (396,571) from holding Jinro Distillers Co or give up 18.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinro Distillers Co vs. Daejung Chemicals Metals
Performance |
| Timeline |
| Jinro Distillers |
| Daejung Chemicals Metals |
Jinro Distillers and Daejung Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinro Distillers and Daejung Chemicals
The main advantage of trading using opposite Jinro Distillers and Daejung Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinro Distillers position performs unexpectedly, Daejung Chemicals 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 Daejung Chemicals will offset losses from the drop in Daejung Chemicals' long position.| Jinro Distillers vs. LG Display | Jinro Distillers vs. Hyundai Motor | Jinro Distillers vs. Hyundai Motor Co | Jinro Distillers vs. Hyundai Motor Co |
| Daejung Chemicals vs. LG Chem | Daejung Chemicals vs. DukSan Neolux CoLtd | Daejung Chemicals vs. Hyosung Chemical Corp | Daejung Chemicals vs. LIG ES SPAC |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |