Correlation Between Insung Information and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both Insung Information and Jeong Moon 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 Insung Information and Jeong Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and Jeong Moon Information, you can compare the effects of market volatilities on Insung Information and Jeong Moon 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 Insung Information with a short position of Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and Jeong Moon.
Diversification Opportunities for Insung Information and Jeong Moon
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Insung and Jeong is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information Co and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information and Insung Information 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 Insung Information Co are associated (or correlated) with Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of Insung Information i.e., Insung Information and Jeong Moon go up and down completely randomly.
Pair Corralation between Insung Information and Jeong Moon
Assuming the 90 days trading horizon Insung Information Co is expected to under-perform the Jeong Moon. In addition to that, Insung Information is 1.77 times more volatile than Jeong Moon Information. It trades about -0.09 of its total potential returns per unit of risk. Jeong Moon Information is currently generating about -0.09 per unit of volatility. If you would invest 93,600 in Jeong Moon Information on August 28, 2024 and sell it today you would lose (2,800) from holding Jeong Moon Information or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insung Information Co vs. Jeong Moon Information
Performance |
| Timeline |
| Insung Information |
| Jeong Moon Information |
Insung Information and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and Jeong Moon
The main advantage of trading using opposite Insung Information and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.| Insung Information vs. Korea Real Estate | Insung Information vs. Korea Ratings Co | Insung Information vs. IQuest Co | Insung Information vs. Wonbang Tech Co |
| Jeong Moon vs. Korea Real Estate | Jeong Moon vs. Korea Ratings Co | Jeong Moon vs. IQuest Co | Jeong Moon vs. Wonbang 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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