Correlation Between Homecast CoLtd and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Homecast CoLtd and Jeju Bank 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 Homecast CoLtd and Jeju Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homecast CoLtd and Jeju Bank, you can compare the effects of market volatilities on Homecast CoLtd and Jeju Bank 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 Homecast CoLtd with a short position of Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homecast CoLtd and Jeju Bank.
Diversification Opportunities for Homecast CoLtd and Jeju Bank
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Homecast and Jeju is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Homecast CoLtd and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank and Homecast CoLtd 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 Homecast CoLtd are associated (or correlated) with Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Homecast CoLtd i.e., Homecast CoLtd and Jeju Bank go up and down completely randomly.
Pair Corralation between Homecast CoLtd and Jeju Bank
Assuming the 90 days trading horizon Homecast CoLtd is expected to under-perform the Jeju Bank. In addition to that, Homecast CoLtd is 1.62 times more volatile than Jeju Bank. It trades about -0.06 of its total potential returns per unit of risk. Jeju Bank is currently generating about -0.05 per unit of volatility. If you would invest 924,000 in Jeju Bank on November 7, 2024 and sell it today you would lose (126,000) from holding Jeju Bank or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homecast CoLtd vs. Jeju Bank
Performance |
| Timeline |
| Homecast CoLtd |
| Jeju Bank |
Homecast CoLtd and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homecast CoLtd and Jeju Bank
The main advantage of trading using opposite Homecast CoLtd and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homecast CoLtd position performs unexpectedly, Jeju Bank 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 Bank will offset losses from the drop in Jeju Bank's long position.| Homecast CoLtd vs. Kg Chemical | Homecast CoLtd vs. Ssangyong Information Communication | Homecast CoLtd vs. Tae Kyung Chemical | Homecast CoLtd vs. TK Chemical |
| Jeju Bank vs. NICE Information Service | Jeju Bank vs. Nice Information Telecommunication | Jeju Bank vs. SAMG Entertainment Co | Jeju Bank vs. Alton Sports CoLtd |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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