Correlation Between SCI Information and Jeju Air
Can any of the company-specific risk be diversified away by investing in both SCI Information and Jeju Air 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 SCI Information and Jeju Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCI Information Service and Jeju Air Co, you can compare the effects of market volatilities on SCI Information and Jeju Air 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 SCI Information with a short position of Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and Jeju Air.
Diversification Opportunities for SCI Information and Jeju Air
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCI and Jeju is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air and SCI 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 SCI Information Service are associated (or correlated) with Jeju Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Air has no effect on the direction of SCI Information i.e., SCI Information and Jeju Air go up and down completely randomly.
Pair Corralation between SCI Information and Jeju Air
Assuming the 90 days trading horizon SCI Information Service is expected to generate 0.73 times more return on investment than Jeju Air. However, SCI Information Service is 1.37 times less risky than Jeju Air. It trades about 0.1 of its potential returns per unit of risk. Jeju Air Co is currently generating about -0.02 per unit of risk. If you would invest 210,500 in SCI Information Service on September 13, 2024 and sell it today you would earn a total of 8,000 from holding SCI Information Service or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCI Information Service vs. Jeju Air Co
Performance |
| Timeline |
| SCI Information Service |
| Jeju Air |
SCI Information and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and Jeju Air
The main advantage of trading using opposite SCI Information and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information position performs unexpectedly, Jeju Air 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 Air will offset losses from the drop in Jeju Air's long position.| SCI Information vs. KB Financial Group | SCI Information vs. Shinhan Financial Group | SCI Information vs. Hana Financial | SCI Information vs. Woori Financial Group |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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