Correlation Between Cloud Air and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Cloud Air and Jeju Bank 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 Cloud Air and Jeju Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloud Air CoLtd and Jeju Bank, you can compare the effects of market volatilities on Cloud Air and Jeju Bank 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 Cloud Air with a short position of Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Air and Jeju Bank.
Diversification Opportunities for Cloud Air and Jeju Bank
Very weak diversification
The 3 months correlation between Cloud and Jeju is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Air CoLtd and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank and Cloud Air 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 Cloud Air CoLtd are associated (or correlated) with Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Cloud Air i.e., Cloud Air and Jeju Bank go up and down completely randomly.
Pair Corralation between Cloud Air and Jeju Bank
Assuming the 90 days trading horizon Cloud Air CoLtd is expected to generate 1.01 times more return on investment than Jeju Bank. However, Cloud Air is 1.01 times more volatile than Jeju Bank. It trades about -0.17 of its potential returns per unit of risk. Jeju Bank is currently generating about -0.35 per unit of risk. If you would invest 88,800 in Cloud Air CoLtd on October 29, 2024 and sell it today you would lose (3,300) from holding Cloud Air CoLtd or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloud Air CoLtd vs. Jeju Bank
Performance |
| Timeline |
| Cloud Air CoLtd |
| Jeju Bank |
Cloud Air and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloud Air and Jeju Bank
The main advantage of trading using opposite Cloud Air and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Air position performs unexpectedly, Jeju Bank 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 Bank will offset losses from the drop in Jeju Bank's long position.| Cloud Air vs. Dgb Financial | Cloud Air vs. DB Insurance Co | Cloud Air vs. LG Display Co | Cloud Air vs. InfoBank |
| Jeju Bank vs. Heungkuk Metaltech CoLtd | Jeju Bank vs. Duksan Hi Metal | Jeju Bank vs. Homecast CoLtd | Jeju Bank vs. Jeju Semiconductor Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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