Correlation Between Jeong Moon and Kumho Petro
Can any of the company-specific risk be diversified away by investing in both Jeong Moon and Kumho Petro 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 Kumho Petro 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 Kumho Petro Chemical, you can compare the effects of market volatilities on Jeong Moon and Kumho Petro 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 Kumho Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and Kumho Petro.
Diversification Opportunities for Jeong Moon and Kumho Petro
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jeong and Kumho is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and Kumho Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Petro Chemical 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 Kumho Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Petro Chemical has no effect on the direction of Jeong Moon i.e., Jeong Moon and Kumho Petro go up and down completely randomly.
Pair Corralation between Jeong Moon and Kumho Petro
Assuming the 90 days trading horizon Jeong Moon is expected to generate 2.3 times less return on investment than Kumho Petro. But when comparing it to its historical volatility, Jeong Moon Information is 1.44 times less risky than Kumho Petro. It trades about 0.17 of its potential returns per unit of risk. Kumho Petro Chemical is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 4,760,000 in Kumho Petro Chemical on November 8, 2024 and sell it today you would earn a total of 530,000 from holding Kumho Petro Chemical or generate 11.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeong Moon Information vs. Kumho Petro Chemical
Performance |
| Timeline |
| Jeong Moon Information |
| Kumho Petro Chemical |
Jeong Moon and Kumho Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeong Moon and Kumho Petro
The main advantage of trading using opposite Jeong Moon and Kumho Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeong Moon position performs unexpectedly, Kumho Petro 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 Kumho Petro will offset losses from the drop in Kumho Petro's long position.| Jeong Moon vs. Sungmoon Electronics Co | Jeong Moon vs. Shinil Electronics Co | Jeong Moon vs. CU Medical Systems | Jeong Moon vs. GS Retail Co |
| Kumho Petro vs. Automobile Pc | Kumho Petro vs. Hana Financial | Kumho Petro vs. Global Standard Technology | Kumho Petro vs. Shinhan Inverse Copper |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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