Correlation Between Daishin Information and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Daishin Information and Jeju Beer 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 Daishin Information and Jeju Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Information Communications and Jeju Beer Co, you can compare the effects of market volatilities on Daishin Information and Jeju Beer 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 Daishin Information with a short position of Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and Jeju Beer.
Diversification Opportunities for Daishin Information and Jeju Beer
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Daishin and Jeju is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer and Daishin Information 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 Daishin Information Communications are associated (or correlated) with Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Daishin Information i.e., Daishin Information and Jeju Beer go up and down completely randomly.
Pair Corralation between Daishin Information and Jeju Beer
Assuming the 90 days trading horizon Daishin Information Communications is expected to under-perform the Jeju Beer. But the stock apears to be less risky and, when comparing its historical volatility, Daishin Information Communications is 2.13 times less risky than Jeju Beer. The stock trades about -0.03 of its potential returns per unit of risk. The Jeju Beer Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 297,000 in Jeju Beer Co on September 2, 2024 and sell it today you would earn a total of 28,000 from holding Jeju Beer Co or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Information Communicat vs. Jeju Beer Co
Performance |
| Timeline |
| Daishin Information |
| Jeju Beer |
Daishin Information and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Information and Jeju Beer
The main advantage of trading using opposite Daishin Information and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information position performs unexpectedly, Jeju Beer 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 Beer will offset losses from the drop in Jeju Beer's long position.| Daishin Information vs. Busan Industrial Co | Daishin Information vs. Busan Ind | Daishin Information vs. Mirae Asset Daewoo | Daishin Information vs. Finebesteel |
| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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