Correlation Between System and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both System and Jeong Moon 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 System and Jeong Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between System and Application and Jeong Moon Information, you can compare the effects of market volatilities on System and Jeong Moon 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 System with a short position of Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of System and Jeong Moon.
Diversification Opportunities for System and Jeong Moon
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between System and Jeong is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding System and Application and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information and System 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 System and Application are associated (or correlated) with Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of System i.e., System and Jeong Moon go up and down completely randomly.
Pair Corralation between System and Jeong Moon
Assuming the 90 days trading horizon System is expected to generate 1.07 times less return on investment than Jeong Moon. In addition to that, System is 1.48 times more volatile than Jeong Moon Information. It trades about 0.07 of its total potential returns per unit of risk. Jeong Moon Information is currently generating about 0.11 per unit of volatility. If you would invest 78,800 in Jeong Moon Information on October 12, 2024 and sell it today you would earn a total of 3,400 from holding Jeong Moon Information or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
System and Application vs. Jeong Moon Information
Performance |
| Timeline |
| System and Application |
| Jeong Moon Information |
System and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with System and Jeong Moon
The main advantage of trading using opposite System and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if System position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.| System vs. Ssangyong Information Communication | System vs. Daishin Information Communications | System vs. Lotte Data Communication | System vs. Echomarketing CoLtd |
| Jeong Moon vs. Korea Investment Holdings | Jeong Moon vs. Chorokbaem Healthcare Co | Jeong Moon vs. Pureun Mutual Savings | Jeong Moon vs. Korea Shipbuilding Offshore |
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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