Correlation Between EBEST Investment and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Jeju Beer 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 Beer 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 Beer Co, you can compare the effects of market volatilities on EBEST Investment and Jeju Beer 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 Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Jeju Beer.
Diversification Opportunities for EBEST Investment and Jeju Beer
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EBEST and Jeju is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer 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 Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of EBEST Investment i.e., EBEST Investment and Jeju Beer go up and down completely randomly.
Pair Corralation between EBEST Investment and Jeju Beer
Assuming the 90 days trading horizon EBEST Investment is expected to generate 21.69 times less return on investment than Jeju Beer. But when comparing it to its historical volatility, EBEST Investment Securities is 3.49 times less risky than Jeju Beer. It trades about 0.03 of its potential returns per unit of risk. Jeju Beer Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 236,500 in Jeju Beer Co on November 28, 2024 and sell it today you would earn a total of 30,000 from holding Jeju Beer Co or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Jeju Beer Co
Performance |
| Timeline |
| EBEST Investment Sec |
| Jeju Beer |
EBEST Investment and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Jeju Beer
The main advantage of trading using opposite EBEST Investment and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Jeju Beer 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 Beer will offset losses from the drop in Jeju Beer's long position.| EBEST Investment vs. Nable Communications | EBEST Investment vs. Pureun Mutual Savings | EBEST Investment vs. Aju IB Investment | EBEST Investment vs. Neungyule Education |
| Jeju Beer vs. Lotte Rental Co | Jeju Beer vs. V One Tech Co | Jeju Beer vs. Daedong Metals Co | Jeju Beer vs. Hwangkum Steel Technology |
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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