Correlation Between Jeong Moon and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both Jeong Moon and Hanjoo Light 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 Hanjoo Light 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 Hanjoo Light Metal, you can compare the effects of market volatilities on Jeong Moon and Hanjoo Light 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 Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and Hanjoo Light.
Diversification Opportunities for Jeong Moon and Hanjoo Light
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jeong and Hanjoo is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal 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 Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Jeong Moon i.e., Jeong Moon and Hanjoo Light go up and down completely randomly.
Pair Corralation between Jeong Moon and Hanjoo Light
Assuming the 90 days trading horizon Jeong Moon Information is expected to generate 0.55 times more return on investment than Hanjoo Light. However, Jeong Moon Information is 1.83 times less risky than Hanjoo Light. It trades about -0.03 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.08 per unit of risk. If you would invest 123,100 in Jeong Moon Information on January 24, 2025 and sell it today you would lose (37,900) from holding Jeong Moon Information or give up 30.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeong Moon Information vs. Hanjoo Light Metal
Performance |
| Timeline |
| Jeong Moon Information |
| Hanjoo Light Metal |
Jeong Moon and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeong Moon and Hanjoo Light
The main advantage of trading using opposite Jeong Moon and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeong Moon position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| Jeong Moon vs. Shinil Electronics Co | Jeong Moon vs. Samji Electronics Co | Jeong Moon vs. SK Chemicals Co | Jeong Moon vs. Lotte Data Communication |
| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
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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