Correlation Between Jeju Semiconductor and KEYEASTCoLtd
Can any of the company-specific risk be diversified away by investing in both Jeju Semiconductor and KEYEASTCoLtd 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 KEYEASTCoLtd 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 KEYEASTCoLtd, you can compare the effects of market volatilities on Jeju Semiconductor and KEYEASTCoLtd 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 KEYEASTCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Semiconductor and KEYEASTCoLtd.
Diversification Opportunities for Jeju Semiconductor and KEYEASTCoLtd
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jeju and KEYEASTCoLtd is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Semiconductor Corp and KEYEASTCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYEASTCoLtd 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 KEYEASTCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEYEASTCoLtd has no effect on the direction of Jeju Semiconductor i.e., Jeju Semiconductor and KEYEASTCoLtd go up and down completely randomly.
Pair Corralation between Jeju Semiconductor and KEYEASTCoLtd
Assuming the 90 days trading horizon Jeju Semiconductor Corp is expected to under-perform the KEYEASTCoLtd. In addition to that, Jeju Semiconductor is 1.23 times more volatile than KEYEASTCoLtd. It trades about -0.41 of its total potential returns per unit of risk. KEYEASTCoLtd is currently generating about -0.02 per unit of volatility. If you would invest 435,500 in KEYEASTCoLtd on August 25, 2024 and sell it today you would lose (7,000) from holding KEYEASTCoLtd or give up 1.61% 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. KEYEASTCoLtd
Performance |
| Timeline |
| Jeju Semiconductor Corp |
| KEYEASTCoLtd |
Jeju Semiconductor and KEYEASTCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Semiconductor and KEYEASTCoLtd
The main advantage of trading using opposite Jeju Semiconductor and KEYEASTCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Semiconductor position performs unexpectedly, KEYEASTCoLtd 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 KEYEASTCoLtd will offset losses from the drop in KEYEASTCoLtd's long position.| Jeju Semiconductor vs. Handok Clean Tech | Jeju Semiconductor vs. Dongbang Transport Logistics | Jeju Semiconductor vs. Sung Bo Chemicals | Jeju Semiconductor vs. Dongil Metal Co |
| KEYEASTCoLtd vs. Netmarble Games Corp | KEYEASTCoLtd vs. QUALITAS SEMICONDUCTOR LTD | KEYEASTCoLtd vs. Jeju Semiconductor Corp | KEYEASTCoLtd vs. Cube Entertainment |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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