Correlation Between Cenit and Jeju Air
Can any of the company-specific risk be diversified away by investing in both Cenit 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 Cenit and Jeju Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenit Co and Jeju Air Co, you can compare the effects of market volatilities on Cenit 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 Cenit with a short position of Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenit and Jeju Air.
Diversification Opportunities for Cenit and Jeju Air
Good diversification
The 3 months correlation between Cenit and Jeju is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cenit Co and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air and Cenit 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 Cenit Co 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 Cenit i.e., Cenit and Jeju Air go up and down completely randomly.
Pair Corralation between Cenit and Jeju Air
Assuming the 90 days trading horizon Cenit Co is expected to under-perform the Jeju Air. But the stock apears to be less risky and, when comparing its historical volatility, Cenit Co is 1.64 times less risky than Jeju Air. The stock trades about -0.22 of its potential returns per unit of risk. The Jeju Air Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 910,000 in Jeju Air Co on August 30, 2024 and sell it today you would earn a total of 46,000 from holding Jeju Air Co or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cenit Co vs. Jeju Air Co
Performance |
| Timeline |
| Cenit |
| Jeju Air |
Cenit and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenit and Jeju Air
The main advantage of trading using opposite Cenit and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenit 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.| Cenit vs. Jeju Air Co | Cenit vs. Hanjin Transportation Co | Cenit vs. Taegu Broadcasting | Cenit vs. Korea Air Svc |
| Jeju Air vs. Samsung Electronics Co | Jeju Air vs. Samsung Electronics Co | Jeju Air vs. KB Financial Group | Jeju Air vs. Shinhan Financial Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |