Correlation Between BooKook Steel and Jeju Semiconductor
Can any of the company-specific risk be diversified away by investing in both BooKook Steel and Jeju Semiconductor 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 BooKook Steel and Jeju Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BooKook Steel Co and Jeju Semiconductor Corp, you can compare the effects of market volatilities on BooKook Steel and Jeju Semiconductor 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 BooKook Steel with a short position of Jeju Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of BooKook Steel and Jeju Semiconductor.
Diversification Opportunities for BooKook Steel and Jeju Semiconductor
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BooKook and Jeju is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BooKook Steel Co and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor Corp and BooKook Steel 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 BooKook Steel Co are associated (or correlated) with Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of BooKook Steel i.e., BooKook Steel and Jeju Semiconductor go up and down completely randomly.
Pair Corralation between BooKook Steel and Jeju Semiconductor
Assuming the 90 days trading horizon BooKook Steel is expected to generate 11.61 times less return on investment than Jeju Semiconductor. But when comparing it to its historical volatility, BooKook Steel Co is 3.45 times less risky than Jeju Semiconductor. It trades about 0.09 of its potential returns per unit of risk. Jeju Semiconductor Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 886,000 in Jeju Semiconductor Corp on October 28, 2024 and sell it today you would earn a total of 434,000 from holding Jeju Semiconductor Corp or generate 48.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BooKook Steel Co vs. Jeju Semiconductor Corp
Performance |
| Timeline |
| BooKook Steel |
| Jeju Semiconductor Corp |
BooKook Steel and Jeju Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BooKook Steel and Jeju Semiconductor
The main advantage of trading using opposite BooKook Steel and Jeju Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BooKook Steel position performs unexpectedly, Jeju Semiconductor 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 Semiconductor will offset losses from the drop in Jeju Semiconductor's long position.| BooKook Steel vs. KB Financial Group | BooKook Steel vs. Shinhan Financial Group | BooKook Steel vs. Hana Financial | BooKook Steel vs. Woori Financial Group |
| Jeju Semiconductor vs. Chorokbaem Healthcare Co | Jeju Semiconductor vs. Taegu Broadcasting | Jeju Semiconductor vs. Korean Drug Co | Jeju Semiconductor vs. CU Medical Systems |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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