Correlation Between Haesung Industrial and Jeju Semiconductor
Can any of the company-specific risk be diversified away by investing in both Haesung Industrial and Jeju Semiconductor 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 Haesung Industrial and Jeju Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haesung Industrial Co and Jeju Semiconductor Corp, you can compare the effects of market volatilities on Haesung Industrial and Jeju Semiconductor 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 Haesung Industrial with a short position of Jeju Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haesung Industrial and Jeju Semiconductor.
Diversification Opportunities for Haesung Industrial and Jeju Semiconductor
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haesung and Jeju is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Haesung Industrial Co and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor Corp and Haesung Industrial 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 Haesung Industrial Co are associated (or correlated) with Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of Haesung Industrial i.e., Haesung Industrial and Jeju Semiconductor go up and down completely randomly.
Pair Corralation between Haesung Industrial and Jeju Semiconductor
Assuming the 90 days trading horizon Haesung Industrial Co is expected to under-perform the Jeju Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Haesung Industrial Co is 2.98 times less risky than Jeju Semiconductor. The stock trades about -0.06 of its potential returns per unit of risk. The Jeju Semiconductor Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 384,000 in Jeju Semiconductor Corp on August 27, 2024 and sell it today you would earn a total of 567,000 from holding Jeju Semiconductor Corp or generate 147.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haesung Industrial Co vs. Jeju Semiconductor Corp
Performance |
| Timeline |
| Haesung Industrial |
| Jeju Semiconductor Corp |
Haesung Industrial and Jeju Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haesung Industrial and Jeju Semiconductor
The main advantage of trading using opposite Haesung Industrial and Jeju Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haesung Industrial position performs unexpectedly, Jeju Semiconductor 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 Jeju Semiconductor will offset losses from the drop in Jeju Semiconductor's long position.| Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. Busan Ind | Haesung Industrial vs. Mirae Asset Daewoo | Haesung Industrial vs. UNISEM Co |
| Jeju Semiconductor vs. Korea Real Estate | Jeju Semiconductor vs. Korea Ratings Co | Jeju Semiconductor vs. IQuest Co | Jeju Semiconductor 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 Stocks Directory module to find actively traded stocks across global markets.
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