Correlation Between Jeju Semiconductor and Korea Air
Can any of the company-specific risk be diversified away by investing in both Jeju Semiconductor and Korea 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 Jeju Semiconductor and Korea Air 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 Korea Air Svc, you can compare the effects of market volatilities on Jeju Semiconductor and Korea 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 Jeju Semiconductor with a short position of Korea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Semiconductor and Korea Air.
Diversification Opportunities for Jeju Semiconductor and Korea Air
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jeju and Korea is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Semiconductor Corp and Korea Air Svc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Air Svc 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 Korea Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Air Svc has no effect on the direction of Jeju Semiconductor i.e., Jeju Semiconductor and Korea Air go up and down completely randomly.
Pair Corralation between Jeju Semiconductor and Korea Air
Assuming the 90 days trading horizon Jeju Semiconductor Corp is expected to generate 4.94 times more return on investment than Korea Air. However, Jeju Semiconductor is 4.94 times more volatile than Korea Air Svc. It trades about 0.3 of its potential returns per unit of risk. Korea Air Svc is currently generating about -0.08 per unit of risk. If you would invest 910,000 in Jeju Semiconductor Corp on October 25, 2024 and sell it today you would earn a total of 397,000 from holding Jeju Semiconductor Corp or generate 43.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Semiconductor Corp vs. Korea Air Svc
Performance |
| Timeline |
| Jeju Semiconductor Corp |
| Korea Air Svc |
Jeju Semiconductor and Korea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Semiconductor and Korea Air
The main advantage of trading using opposite Jeju Semiconductor and Korea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Semiconductor position performs unexpectedly, Korea 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 Korea Air will offset losses from the drop in Korea Air's long position.| Jeju Semiconductor vs. SK Chemicals Co | Jeju Semiconductor vs. Homecast CoLtd | Jeju Semiconductor vs. Polaris Office Corp | Jeju Semiconductor vs. FoodNamoo |
| Korea Air vs. SAMG Entertainment Co | Korea Air vs. SM Entertainment Co | Korea Air vs. Kbi Metal Co | Korea Air vs. T3 Entertainment 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance |