Correlation Between HYUNDAI BIOLAND and Jeju Air
Can any of the company-specific risk be diversified away by investing in both HYUNDAI BIOLAND 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 HYUNDAI BIOLAND and Jeju Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYUNDAI BIOLAND CoLtd and Jeju Air Co, you can compare the effects of market volatilities on HYUNDAI BIOLAND 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 HYUNDAI BIOLAND with a short position of Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYUNDAI BIOLAND and Jeju Air.
Diversification Opportunities for HYUNDAI BIOLAND and Jeju Air
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HYUNDAI and Jeju is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding HYUNDAI BIOLAND CoLtd and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air and HYUNDAI BIOLAND 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 HYUNDAI BIOLAND CoLtd 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 HYUNDAI BIOLAND i.e., HYUNDAI BIOLAND and Jeju Air go up and down completely randomly.
Pair Corralation between HYUNDAI BIOLAND and Jeju Air
Assuming the 90 days trading horizon HYUNDAI BIOLAND CoLtd is expected to under-perform the Jeju Air. In addition to that, HYUNDAI BIOLAND is 1.29 times more volatile than Jeju Air Co. It trades about -0.02 of its total potential returns per unit of risk. Jeju Air Co is currently generating about -0.03 per unit of volatility. If you would invest 1,360,000 in Jeju Air Co on September 5, 2024 and sell it today you would lose (422,000) from holding Jeju Air Co or give up 31.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYUNDAI BIOLAND CoLtd vs. Jeju Air Co
Performance |
| Timeline |
| HYUNDAI BIOLAND CoLtd |
| Jeju Air |
HYUNDAI BIOLAND and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYUNDAI BIOLAND and Jeju Air
The main advantage of trading using opposite HYUNDAI BIOLAND and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYUNDAI BIOLAND 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.| HYUNDAI BIOLAND vs. LG Display | HYUNDAI BIOLAND vs. Hyundai Motor | HYUNDAI BIOLAND vs. Hyundai Motor Co | HYUNDAI BIOLAND vs. Hyundai Motor Co |
| Jeju Air vs. Homecast CoLtd | Jeju Air vs. Korea Information Engineering | Jeju Air vs. SCI Information Service | Jeju Air vs. Sewoon Medical 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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