Correlation Between Jeong Moon and Choil Aluminum
Can any of the company-specific risk be diversified away by investing in both Jeong Moon and Choil Aluminum 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 Choil Aluminum 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 Choil Aluminum, you can compare the effects of market volatilities on Jeong Moon and Choil Aluminum 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 Choil Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and Choil Aluminum.
Diversification Opportunities for Jeong Moon and Choil Aluminum
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jeong and Choil is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and Choil Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choil Aluminum 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 Choil Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choil Aluminum has no effect on the direction of Jeong Moon i.e., Jeong Moon and Choil Aluminum go up and down completely randomly.
Pair Corralation between Jeong Moon and Choil Aluminum
Assuming the 90 days trading horizon Jeong Moon Information is expected to under-perform the Choil Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Jeong Moon Information is 1.68 times less risky than Choil Aluminum. The stock trades about -0.03 of its potential returns per unit of risk. The Choil Aluminum is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 232,500 in Choil Aluminum on November 1, 2024 and sell it today you would lose (82,700) from holding Choil Aluminum or give up 35.57% 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. Choil Aluminum
Performance |
| Timeline |
| Jeong Moon Information |
| Choil Aluminum |
Jeong Moon and Choil Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeong Moon and Choil Aluminum
The main advantage of trading using opposite Jeong Moon and Choil Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeong Moon position performs unexpectedly, Choil Aluminum 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 Choil Aluminum will offset losses from the drop in Choil Aluminum's long position.| Jeong Moon vs. Sangsangin Investment Securities | Jeong Moon vs. Samyoung Electronics Co | Jeong Moon vs. Samji Electronics Co | Jeong Moon vs. Golden Bridge Investment |
| Choil Aluminum vs. Sewoon Medical Co | Choil Aluminum vs. DB Insurance Co | Choil Aluminum vs. LG Household Healthcare | Choil Aluminum vs. Vitzro Tech 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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