Correlation Between Jeong Moon and Lindeman Asia
Can any of the company-specific risk be diversified away by investing in both Jeong Moon and Lindeman Asia 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 Lindeman Asia 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 Lindeman Asia Investment, you can compare the effects of market volatilities on Jeong Moon and Lindeman Asia 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 Lindeman Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and Lindeman Asia.
Diversification Opportunities for Jeong Moon and Lindeman Asia
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jeong and Lindeman is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and Lindeman Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindeman Asia Investment 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 Lindeman Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindeman Asia Investment has no effect on the direction of Jeong Moon i.e., Jeong Moon and Lindeman Asia go up and down completely randomly.
Pair Corralation between Jeong Moon and Lindeman Asia
Assuming the 90 days trading horizon Jeong Moon Information is expected to under-perform the Lindeman Asia. But the stock apears to be less risky and, when comparing its historical volatility, Jeong Moon Information is 2.32 times less risky than Lindeman Asia. The stock trades about -0.03 of its potential returns per unit of risk. The Lindeman Asia Investment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 417,317 in Lindeman Asia Investment on October 23, 2024 and sell it today you would earn a total of 10,183 from holding Lindeman Asia Investment or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeong Moon Information vs. Lindeman Asia Investment
Performance |
| Timeline |
| Jeong Moon Information |
| Lindeman Asia Investment |
Jeong Moon and Lindeman Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeong Moon and Lindeman Asia
The main advantage of trading using opposite Jeong Moon and Lindeman Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeong Moon position performs unexpectedly, Lindeman Asia 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 Lindeman Asia will offset losses from the drop in Lindeman Asia's long position.| Jeong Moon vs. SK Chemicals Co | Jeong Moon vs. SK Telecom Co | Jeong Moon vs. Seoul Electronics Telecom | Jeong Moon vs. Sejong Telecom |
| Lindeman Asia vs. Industrial Bank | Lindeman Asia vs. Nice Information Telecommunication | Lindeman Asia vs. Jeong Moon Information | Lindeman Asia vs. DataSolution |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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