Correlation Between Jinro Distillers and Nable Communications
Can any of the company-specific risk be diversified away by investing in both Jinro Distillers and Nable Communications 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 Nable Communications 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 Nable Communications, you can compare the effects of market volatilities on Jinro Distillers and Nable Communications 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 Nable Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinro Distillers and Nable Communications.
Diversification Opportunities for Jinro Distillers and Nable Communications
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jinro and Nable is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co and Nable Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nable Communications 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 Nable Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nable Communications has no effect on the direction of Jinro Distillers i.e., Jinro Distillers and Nable Communications go up and down completely randomly.
Pair Corralation between Jinro Distillers and Nable Communications
Assuming the 90 days trading horizon Jinro Distillers Co is expected to generate 0.3 times more return on investment than Nable Communications. However, Jinro Distillers Co is 3.36 times less risky than Nable Communications. It trades about 0.34 of its potential returns per unit of risk. Nable Communications is currently generating about -0.05 per unit of risk. If you would invest 1,665,559 in Jinro Distillers Co on October 23, 2024 and sell it today you would earn a total of 51,441 from holding Jinro Distillers Co or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jinro Distillers Co vs. Nable Communications
Performance |
| Timeline |
| Jinro Distillers |
| Nable Communications |
Jinro Distillers and Nable Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jinro Distillers and Nable Communications
The main advantage of trading using opposite Jinro Distillers and Nable Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinro Distillers position performs unexpectedly, Nable Communications 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 Nable Communications will offset losses from the drop in Nable Communications' long position.| Jinro Distillers vs. CU Tech Corp | Jinro Distillers vs. Hanjoo Light Metal | Jinro Distillers vs. LG Household Healthcare | Jinro Distillers vs. Lion Chemtech Co |
| Nable Communications vs. Jinro Distillers Co | Nable Communications vs. Korean Reinsurance Co | Nable Communications vs. Daiyang Metal Co | Nable Communications vs. Formetal 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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