Correlation Between Cloud Air and Jinro Distillers
Can any of the company-specific risk be diversified away by investing in both Cloud Air 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 Cloud Air and Jinro Distillers 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 Jinro Distillers Co, you can compare the effects of market volatilities on Cloud Air 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 Cloud Air with a short position of Jinro Distillers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Air and Jinro Distillers.
Diversification Opportunities for Cloud Air and Jinro Distillers
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cloud and Jinro is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Air CoLtd and Jinro Distillers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinro Distillers 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 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 Cloud Air i.e., Cloud Air and Jinro Distillers go up and down completely randomly.
Pair Corralation between Cloud Air and Jinro Distillers
Assuming the 90 days trading horizon Cloud Air CoLtd is expected to under-perform the Jinro Distillers. In addition to that, Cloud Air is 3.95 times more volatile than Jinro Distillers Co. It trades about -0.09 of its total potential returns per unit of risk. Jinro Distillers Co is currently generating about 0.5 per unit of volatility. If you would invest 1,634,751 in Jinro Distillers Co on October 16, 2024 and sell it today you would earn a total of 85,249 from holding Jinro Distillers Co or generate 5.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Cloud Air CoLtd vs. Jinro Distillers Co
Performance |
| Timeline |
| Cloud Air CoLtd |
| Jinro Distillers |
Cloud Air and Jinro Distillers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloud Air and Jinro Distillers
The main advantage of trading using opposite Cloud Air and Jinro Distillers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Air 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.| Cloud Air vs. Seoul Electronics Telecom | Cloud Air vs. Shinil Electronics Co | Cloud Air vs. Polaris Office Corp | Cloud Air vs. KyungIn Electronics Co |
| Jinro Distillers vs. Eagle Veterinary Technology | Jinro Distillers vs. Dongil Technology | Jinro Distillers vs. Asia Technology Co | Jinro Distillers vs. ENF Technology 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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