Correlation Between Jeong Moon and Daelim Trading
Can any of the company-specific risk be diversified away by investing in both Jeong Moon and Daelim Trading 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 Jeong Moon and Daelim Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeong Moon Information and Daelim Trading Co, you can compare the effects of market volatilities on Jeong Moon and Daelim Trading 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 Jeong Moon with a short position of Daelim Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and Daelim Trading.
Diversification Opportunities for Jeong Moon and Daelim Trading
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jeong and Daelim is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and Daelim Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Trading and Jeong Moon 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 Jeong Moon Information are associated (or correlated) with Daelim Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Trading has no effect on the direction of Jeong Moon i.e., Jeong Moon and Daelim Trading go up and down completely randomly.
Pair Corralation between Jeong Moon and Daelim Trading
Assuming the 90 days trading horizon Jeong Moon Information is expected to under-perform the Daelim Trading. But the stock apears to be less risky and, when comparing its historical volatility, Jeong Moon Information is 1.09 times less risky than Daelim Trading. The stock trades about -0.03 of its potential returns per unit of risk. The Daelim Trading Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 390,488 in Daelim Trading Co on October 29, 2024 and sell it today you would lose (130,988) from holding Daelim Trading Co or give up 33.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeong Moon Information vs. Daelim Trading Co
Performance |
| Timeline |
| Jeong Moon Information |
| Daelim Trading |
Jeong Moon and Daelim Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeong Moon and Daelim Trading
The main advantage of trading using opposite Jeong Moon and Daelim Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeong Moon position performs unexpectedly, Daelim Trading 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 Daelim Trading will offset losses from the drop in Daelim Trading's long position.| Jeong Moon vs. Seoul Semiconductor Co | Jeong Moon vs. Puloon Technology | Jeong Moon vs. Kakao Games Corp | Jeong Moon vs. Lotte Rental Co |
| Daelim Trading vs. Hyundai Home Shopping | Daelim Trading vs. KEPCO Engineering Construction | Daelim Trading vs. Seoam Machinery Industry | Daelim Trading vs. DB Insurance 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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