Correlation Between Seoyon Topmetal and Jeju Air
Can any of the company-specific risk be diversified away by investing in both Seoyon Topmetal and Jeju Air 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 Seoyon Topmetal and Jeju Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoyon Topmetal Co and Jeju Air Co, you can compare the effects of market volatilities on Seoyon Topmetal and Jeju Air 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 Seoyon Topmetal with a short position of Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoyon Topmetal and Jeju Air.
Diversification Opportunities for Seoyon Topmetal and Jeju Air
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Seoyon and Jeju is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Seoyon Topmetal Co and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air and Seoyon Topmetal 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 Seoyon Topmetal Co are associated (or correlated) with Jeju Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Air has no effect on the direction of Seoyon Topmetal i.e., Seoyon Topmetal and Jeju Air go up and down completely randomly.
Pair Corralation between Seoyon Topmetal and Jeju Air
Assuming the 90 days trading horizon Seoyon Topmetal is expected to generate 2.54 times less return on investment than Jeju Air. In addition to that, Seoyon Topmetal is 1.05 times more volatile than Jeju Air Co. It trades about 0.06 of its total potential returns per unit of risk. Jeju Air Co is currently generating about 0.15 per unit of volatility. If you would invest 894,000 in Jeju Air Co on August 29, 2024 and sell it today you would earn a total of 67,000 from holding Jeju Air Co or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoyon Topmetal Co vs. Jeju Air Co
Performance |
| Timeline |
| Seoyon Topmetal |
| Jeju Air |
Seoyon Topmetal and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoyon Topmetal and Jeju Air
The main advantage of trading using opposite Seoyon Topmetal and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoyon Topmetal position performs unexpectedly, Jeju Air 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 Jeju Air will offset losses from the drop in Jeju Air's long position.| Seoyon Topmetal vs. Busan Industrial Co | Seoyon Topmetal vs. Busan Ind | Seoyon Topmetal vs. Mirae Asset Daewoo | Seoyon Topmetal vs. UNISEM Co |
| Jeju Air vs. Samsung Electronics Co | Jeju Air vs. Samsung Electronics Co | Jeju Air vs. Hyundai Motor Co | Jeju Air vs. Hyundai Motor |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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