Correlation Between Jeju Semiconductor and SAMRYOONG CoLtd
Can any of the company-specific risk be diversified away by investing in both Jeju Semiconductor and SAMRYOONG CoLtd 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 SAMRYOONG CoLtd 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 SAMRYOONG CoLtd, you can compare the effects of market volatilities on Jeju Semiconductor and SAMRYOONG CoLtd 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 SAMRYOONG CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Semiconductor and SAMRYOONG CoLtd.
Diversification Opportunities for Jeju Semiconductor and SAMRYOONG CoLtd
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jeju and SAMRYOONG is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Semiconductor Corp and SAMRYOONG CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMRYOONG CoLtd 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 SAMRYOONG CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMRYOONG CoLtd has no effect on the direction of Jeju Semiconductor i.e., Jeju Semiconductor and SAMRYOONG CoLtd go up and down completely randomly.
Pair Corralation between Jeju Semiconductor and SAMRYOONG CoLtd
Assuming the 90 days trading horizon Jeju Semiconductor Corp is expected to generate 2.6 times more return on investment than SAMRYOONG CoLtd. However, Jeju Semiconductor is 2.6 times more volatile than SAMRYOONG CoLtd. It trades about 0.06 of its potential returns per unit of risk. SAMRYOONG CoLtd is currently generating about -0.04 per unit of risk. If you would invest 375,000 in Jeju Semiconductor Corp on September 3, 2024 and sell it today you would earn a total of 504,000 from holding Jeju Semiconductor Corp or generate 134.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Semiconductor Corp vs. SAMRYOONG CoLtd
Performance |
| Timeline |
| Jeju Semiconductor Corp |
| SAMRYOONG CoLtd |
Jeju Semiconductor and SAMRYOONG CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Semiconductor and SAMRYOONG CoLtd
The main advantage of trading using opposite Jeju Semiconductor and SAMRYOONG CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Semiconductor position performs unexpectedly, SAMRYOONG CoLtd 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 SAMRYOONG CoLtd will offset losses from the drop in SAMRYOONG CoLtd's long position.| Jeju Semiconductor vs. Dongsin Engineering Construction | Jeju Semiconductor vs. Doosan Fuel Cell | Jeju Semiconductor vs. Daishin Balance 1 | Jeju Semiconductor vs. Total Soft Bank |
| SAMRYOONG CoLtd vs. LG Chemicals | SAMRYOONG CoLtd vs. POSCO Holdings | SAMRYOONG CoLtd vs. Hanwha Solutions | SAMRYOONG CoLtd vs. Lotte Chemical Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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