Correlation Between MEDIPOST and Jeju Air
Can any of the company-specific risk be diversified away by investing in both MEDIPOST 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 MEDIPOST and Jeju Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDIPOST Co and Jeju Air Co, you can compare the effects of market volatilities on MEDIPOST 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 MEDIPOST with a short position of Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIPOST and Jeju Air.
Diversification Opportunities for MEDIPOST and Jeju Air
Excellent diversification
The 3 months correlation between MEDIPOST and Jeju is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding MEDIPOST Co and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air and MEDIPOST 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 MEDIPOST Co 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 MEDIPOST i.e., MEDIPOST and Jeju Air go up and down completely randomly.
Pair Corralation between MEDIPOST and Jeju Air
Assuming the 90 days trading horizon MEDIPOST Co is expected to generate 3.1 times more return on investment than Jeju Air. However, MEDIPOST is 3.1 times more volatile than Jeju Air Co. It trades about 0.14 of its potential returns per unit of risk. Jeju Air Co is currently generating about -0.18 per unit of risk. If you would invest 739,000 in MEDIPOST Co on November 2, 2024 and sell it today you would earn a total of 422,000 from holding MEDIPOST Co or generate 57.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDIPOST Co vs. Jeju Air Co
Performance |
| Timeline |
| MEDIPOST |
| Jeju Air |
MEDIPOST and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDIPOST and Jeju Air
The main advantage of trading using opposite MEDIPOST and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDIPOST 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.| MEDIPOST vs. Heungkuk Metaltech CoLtd | MEDIPOST vs. Settlebank | MEDIPOST vs. Samsung Life Insurance | MEDIPOST vs. Dongil Metal Co |
| Jeju Air vs. Lotte Rental Co | Jeju Air vs. Daishin Information Communications | Jeju Air vs. Automobile Pc | Jeju Air vs. Samsung Life Insurance |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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