Correlation Between Shinsegae Food and Jeju Air
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food 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 Shinsegae Food and Jeju Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and Jeju Air Co, you can compare the effects of market volatilities on Shinsegae Food 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 Shinsegae Food with a short position of Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and Jeju Air.
Diversification Opportunities for Shinsegae Food and Jeju Air
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shinsegae and Jeju is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air and Shinsegae Food 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 Shinsegae Food 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 Shinsegae Food i.e., Shinsegae Food and Jeju Air go up and down completely randomly.
Pair Corralation between Shinsegae Food and Jeju Air
Assuming the 90 days trading horizon Shinsegae Food is expected to generate 0.82 times more return on investment than Jeju Air. However, Shinsegae Food is 1.22 times less risky than Jeju Air. It trades about -0.05 of its potential returns per unit of risk. Jeju Air Co is currently generating about -0.06 per unit of risk. If you would invest 3,882,251 in Shinsegae Food on September 12, 2024 and sell it today you would lose (777,251) from holding Shinsegae Food or give up 20.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Food vs. Jeju Air Co
Performance |
| Timeline |
| Shinsegae Food |
| Jeju Air |
Shinsegae Food and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and Jeju Air
The main advantage of trading using opposite Shinsegae Food and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food 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.| Shinsegae Food vs. Haesung Industrial Co | Shinsegae Food vs. Eagon Industrial Co | Shinsegae Food vs. A Tech Solution Co | Shinsegae Food vs. Intellian Technologies |
| Jeju Air vs. Eugene Technology CoLtd | Jeju Air vs. NewFlex Technology Co | Jeju Air vs. Daelim Trading Co | Jeju Air vs. Golden Bridge Investment |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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