Correlation Between Jeju Semiconductor and Samhwa Paint
Can any of the company-specific risk be diversified away by investing in both Jeju Semiconductor and Samhwa Paint 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 Jeju Semiconductor and Samhwa Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Semiconductor Corp and Samhwa Paint Industrial, you can compare the effects of market volatilities on Jeju Semiconductor and Samhwa Paint 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 Jeju Semiconductor with a short position of Samhwa Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Semiconductor and Samhwa Paint.
Diversification Opportunities for Jeju Semiconductor and Samhwa Paint
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jeju and Samhwa is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Semiconductor Corp and Samhwa Paint Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhwa Paint Industrial and Jeju Semiconductor 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 Jeju Semiconductor Corp are associated (or correlated) with Samhwa Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhwa Paint Industrial has no effect on the direction of Jeju Semiconductor i.e., Jeju Semiconductor and Samhwa Paint go up and down completely randomly.
Pair Corralation between Jeju Semiconductor and Samhwa Paint
Assuming the 90 days trading horizon Jeju Semiconductor Corp is expected to under-perform the Samhwa Paint. In addition to that, Jeju Semiconductor is 1.66 times more volatile than Samhwa Paint Industrial. It trades about -0.18 of its total potential returns per unit of risk. Samhwa Paint Industrial is currently generating about -0.05 per unit of volatility. If you would invest 696,000 in Samhwa Paint Industrial on August 31, 2024 and sell it today you would lose (44,000) from holding Samhwa Paint Industrial or give up 6.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Semiconductor Corp vs. Samhwa Paint Industrial
Performance |
| Timeline |
| Jeju Semiconductor Corp |
| Samhwa Paint Industrial |
Jeju Semiconductor and Samhwa Paint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Semiconductor and Samhwa Paint
The main advantage of trading using opposite Jeju Semiconductor and Samhwa Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Semiconductor position performs unexpectedly, Samhwa Paint 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 Samhwa Paint will offset losses from the drop in Samhwa Paint's long position.| Jeju Semiconductor vs. MNtech Co | Jeju Semiconductor vs. Lion Chemtech Co | Jeju Semiconductor vs. Eagle Veterinary Technology | Jeju Semiconductor vs. Stic Investments |
| Samhwa Paint vs. Barunson Entertainment Arts | Samhwa Paint vs. Dongil Steel Co | Samhwa Paint vs. T3 Entertainment Co | Samhwa Paint vs. Finebesteel |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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