Correlation Between Korea Computer and Jin Air
Can any of the company-specific risk be diversified away by investing in both Korea Computer and Jin 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 Korea Computer and Jin Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer and Jin Air Co, you can compare the effects of market volatilities on Korea Computer and Jin 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 Korea Computer with a short position of Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and Jin Air.
Diversification Opportunities for Korea Computer and Jin Air
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Jin is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air and Korea Computer 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 Korea Computer are associated (or correlated) with Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of Korea Computer i.e., Korea Computer and Jin Air go up and down completely randomly.
Pair Corralation between Korea Computer and Jin Air
Assuming the 90 days trading horizon Korea Computer is expected to generate 1.31 times more return on investment than Jin Air. However, Korea Computer is 1.31 times more volatile than Jin Air Co. It trades about 0.03 of its potential returns per unit of risk. Jin Air Co is currently generating about -0.04 per unit of risk. If you would invest 398,898 in Korea Computer on December 1, 2024 and sell it today you would earn a total of 66,602 from holding Korea Computer or generate 16.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Computer vs. Jin Air Co
Performance |
| Timeline |
| Korea Computer |
| Jin Air |
Korea Computer and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and Jin Air
The main advantage of trading using opposite Korea Computer and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer position performs unexpectedly, Jin 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 Jin Air will offset losses from the drop in Jin Air's long position.| Korea Computer vs. Sempio Foods Co | Korea Computer vs. Handok Clean Tech | Korea Computer vs. MediaZen | Korea Computer vs. MEDIANA CoLtd |
| Jin Air vs. Industrial Bank | Jin Air vs. Samyung Trading Co | Jin Air vs. E Investment Development | Jin Air vs. Kbi Metal 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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