Correlation Between Korea Real and Jinro Distillers
Can any of the company-specific risk be diversified away by investing in both Korea Real and Jinro Distillers 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 Korea Real and Jinro Distillers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Real Estate and Jinro Distillers Co, you can compare the effects of market volatilities on Korea Real and Jinro Distillers 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 Korea Real with a short position of Jinro Distillers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Jinro Distillers.
Diversification Opportunities for Korea Real and Jinro Distillers
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Jinro is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Jinro Distillers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinro Distillers and Korea Real 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 Korea Real Estate are associated (or correlated) with Jinro Distillers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinro Distillers has no effect on the direction of Korea Real i.e., Korea Real and Jinro Distillers go up and down completely randomly.
Pair Corralation between Korea Real and Jinro Distillers
Assuming the 90 days trading horizon Korea Real Estate is expected to under-perform the Jinro Distillers. In addition to that, Korea Real is 1.04 times more volatile than Jinro Distillers Co. It trades about -0.05 of its total potential returns per unit of risk. Jinro Distillers Co is currently generating about 0.01 per unit of volatility. If you would invest 1,656,015 in Jinro Distillers Co on August 31, 2024 and sell it today you would earn a total of 52,985 from holding Jinro Distillers Co or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Real Estate vs. Jinro Distillers Co
Performance |
| Timeline |
| Korea Real Estate |
| Jinro Distillers |
Korea Real and Jinro Distillers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Jinro Distillers
The main advantage of trading using opposite Korea Real and Jinro Distillers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real position performs unexpectedly, Jinro Distillers 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 Jinro Distillers will offset losses from the drop in Jinro Distillers' long position.| Korea Real vs. KT Submarine Telecom | Korea Real vs. Jb Financial | Korea Real vs. Samsung Life Insurance | Korea Real vs. SK Telecom Co |
| Jinro Distillers vs. Korea Real Estate | Jinro Distillers vs. Korea Ratings Co | Jinro Distillers vs. IQuest Co | Jinro Distillers 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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