Correlation Between Jeong Moon and ECSTELECOM
Can any of the company-specific risk be diversified away by investing in both Jeong Moon and ECSTELECOM 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 ECSTELECOM 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 ECSTELECOM Co, you can compare the effects of market volatilities on Jeong Moon and ECSTELECOM 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 ECSTELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and ECSTELECOM.
Diversification Opportunities for Jeong Moon and ECSTELECOM
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jeong and ECSTELECOM is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and ECSTELECOM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECSTELECOM 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 ECSTELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECSTELECOM has no effect on the direction of Jeong Moon i.e., Jeong Moon and ECSTELECOM go up and down completely randomly.
Pair Corralation between Jeong Moon and ECSTELECOM
Assuming the 90 days trading horizon Jeong Moon Information is expected to under-perform the ECSTELECOM. In addition to that, Jeong Moon is 1.12 times more volatile than ECSTELECOM Co. It trades about -0.09 of its total potential returns per unit of risk. ECSTELECOM Co is currently generating about -0.07 per unit of volatility. If you would invest 299,500 in ECSTELECOM Co on August 28, 2024 and sell it today you would lose (6,500) from holding ECSTELECOM Co or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeong Moon Information vs. ECSTELECOM Co
Performance |
| Timeline |
| Jeong Moon Information |
| ECSTELECOM |
Jeong Moon and ECSTELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeong Moon and ECSTELECOM
The main advantage of trading using opposite Jeong Moon and ECSTELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeong Moon position performs unexpectedly, ECSTELECOM 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 ECSTELECOM will offset losses from the drop in ECSTELECOM's long position.| Jeong Moon vs. Korea Real Estate | Jeong Moon vs. Korea Ratings Co | Jeong Moon vs. IQuest Co | Jeong Moon vs. Wonbang Tech Co |
| ECSTELECOM vs. Busan Industrial Co | ECSTELECOM vs. Busan Ind | ECSTELECOM vs. Mirae Asset Daewoo | ECSTELECOM vs. UNISEM 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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