Correlation Between Jeju Semiconductor and Yooshin Engineering
Can any of the company-specific risk be diversified away by investing in both Jeju Semiconductor and Yooshin Engineering 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 Yooshin Engineering 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 Yooshin Engineering, you can compare the effects of market volatilities on Jeju Semiconductor and Yooshin Engineering 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 Yooshin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Semiconductor and Yooshin Engineering.
Diversification Opportunities for Jeju Semiconductor and Yooshin Engineering
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jeju and Yooshin is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Semiconductor Corp and Yooshin Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yooshin Engineering 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 Yooshin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yooshin Engineering has no effect on the direction of Jeju Semiconductor i.e., Jeju Semiconductor and Yooshin Engineering go up and down completely randomly.
Pair Corralation between Jeju Semiconductor and Yooshin Engineering
Assuming the 90 days trading horizon Jeju Semiconductor Corp is expected to under-perform the Yooshin Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Jeju Semiconductor Corp is 1.4 times less risky than Yooshin Engineering. The stock trades about -0.48 of its potential returns per unit of risk. The Yooshin Engineering is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,335,000 in Yooshin Engineering on August 31, 2024 and sell it today you would earn a total of 150,000 from holding Yooshin Engineering or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jeju Semiconductor Corp vs. Yooshin Engineering
Performance |
| Timeline |
| Jeju Semiconductor Corp |
| Yooshin Engineering |
Jeju Semiconductor and Yooshin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Semiconductor and Yooshin Engineering
The main advantage of trading using opposite Jeju Semiconductor and Yooshin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Semiconductor position performs unexpectedly, Yooshin Engineering 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 Yooshin Engineering will offset losses from the drop in Yooshin Engineering'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 |
| Yooshin Engineering vs. Jin Air Co | Yooshin Engineering vs. Korea Air Svc | Yooshin Engineering vs. Jeju Semiconductor Corp | Yooshin Engineering vs. LG Electronics |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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