Correlation Between EBEST Investment and Jeju Air
Can any of the company-specific risk be diversified away by investing in both EBEST Investment 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 EBEST Investment and Jeju Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and Jeju Air Co, you can compare the effects of market volatilities on EBEST Investment 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 EBEST Investment with a short position of Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Jeju Air.
Diversification Opportunities for EBEST Investment and Jeju Air
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between EBEST and Jeju is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air and EBEST Investment 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 EBEST Investment Securities 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 EBEST Investment i.e., EBEST Investment and Jeju Air go up and down completely randomly.
Pair Corralation between EBEST Investment and Jeju Air
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the Jeju Air. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 1.39 times less risky than Jeju Air. The stock trades about -0.22 of its potential returns per unit of risk. The Jeju Air Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 912,000 in Jeju Air Co on September 3, 2024 and sell it today you would earn a total of 66,000 from holding Jeju Air Co or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Jeju Air Co
Performance |
| Timeline |
| EBEST Investment Sec |
| Jeju Air |
EBEST Investment and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Jeju Air
The main advantage of trading using opposite EBEST Investment and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment 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.| EBEST Investment vs. Worldex Industry Trading | EBEST Investment vs. Woori Technology Investment | EBEST Investment vs. SBI Investment KOREA | EBEST Investment vs. Lindeman Asia Investment |
| Jeju Air vs. LG Display | Jeju Air vs. Hyundai Motor | Jeju Air vs. Hyundai Motor Co | Jeju Air vs. Hyundai Motor 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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