Correlation Between Jinro Distillers and Microfriend
Can any of the company-specific risk be diversified away by investing in both Jinro Distillers and Microfriend 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 Microfriend 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 Microfriend, you can compare the effects of market volatilities on Jinro Distillers and Microfriend 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 Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinro Distillers and Microfriend.
Diversification Opportunities for Jinro Distillers and Microfriend
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jinro and Microfriend is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend 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 Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of Jinro Distillers i.e., Jinro Distillers and Microfriend go up and down completely randomly.
Pair Corralation between Jinro Distillers and Microfriend
Assuming the 90 days trading horizon Jinro Distillers Co is expected to generate 0.22 times more return on investment than Microfriend. However, Jinro Distillers Co is 4.62 times less risky than Microfriend. It trades about 0.06 of its potential returns per unit of risk. Microfriend is currently generating about -0.03 per unit of risk. If you would invest 1,404,309 in Jinro Distillers Co on September 12, 2024 and sell it today you would earn a total of 238,691 from holding Jinro Distillers Co or generate 17.0% 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. Microfriend
Performance |
| Timeline |
| Jinro Distillers |
| Microfriend |
Jinro Distillers and Microfriend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinro Distillers and Microfriend
The main advantage of trading using opposite Jinro Distillers and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinro Distillers position performs unexpectedly, Microfriend 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 Microfriend will offset losses from the drop in Microfriend's long position.| Jinro Distillers vs. Korea New Network | Jinro Distillers vs. ICD Co | Jinro Distillers vs. DYPNF CoLtd | Jinro Distillers vs. Solution Advanced Technology |
| Microfriend vs. Hansol Chemical Co | Microfriend vs. Kukdo Chemical Co | Microfriend vs. Jinro Distillers Co | Microfriend vs. InnoTherapy |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |