Correlation Between Korea New and JC Chemical
Can any of the company-specific risk be diversified away by investing in both Korea New and JC Chemical 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 New and JC Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea New Network and JC Chemical Co, you can compare the effects of market volatilities on Korea New and JC Chemical 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 New with a short position of JC Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea New and JC Chemical.
Diversification Opportunities for Korea New and JC Chemical
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and 137950 is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Korea New Network and JC Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Chemical and Korea New 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 New Network are associated (or correlated) with JC Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Chemical has no effect on the direction of Korea New i.e., Korea New and JC Chemical go up and down completely randomly.
Pair Corralation between Korea New and JC Chemical
Assuming the 90 days trading horizon Korea New Network is expected to generate 0.46 times more return on investment than JC Chemical. However, Korea New Network is 2.17 times less risky than JC Chemical. It trades about -0.16 of its potential returns per unit of risk. JC Chemical Co is currently generating about -0.15 per unit of risk. If you would invest 82,900 in Korea New Network on September 1, 2024 and sell it today you would lose (5,800) from holding Korea New Network or give up 7.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Korea New Network vs. JC Chemical Co
Performance |
| Timeline |
| Korea New Network |
| JC Chemical |
Korea New and JC Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea New and JC Chemical
The main advantage of trading using opposite Korea New and JC Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea New position performs unexpectedly, JC Chemical 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 JC Chemical will offset losses from the drop in JC Chemical's long position.| Korea New vs. KT Submarine Telecom | Korea New vs. SK Telecom Co | Korea New vs. Formetal Co | Korea New vs. Innowireless Co |
| JC Chemical vs. Korea Information Engineering | JC Chemical vs. DataSolution | JC Chemical vs. Cube Entertainment | JC Chemical vs. SCI Information Service |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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