Correlation Between Jeju Semiconductor and BGF Retail
Can any of the company-specific risk be diversified away by investing in both Jeju Semiconductor and BGF Retail 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 BGF Retail 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 BGF Retail Co, you can compare the effects of market volatilities on Jeju Semiconductor and BGF Retail 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 BGF Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Semiconductor and BGF Retail.
Diversification Opportunities for Jeju Semiconductor and BGF Retail
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jeju and BGF is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Semiconductor Corp and BGF Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Retail 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 BGF Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Retail has no effect on the direction of Jeju Semiconductor i.e., Jeju Semiconductor and BGF Retail go up and down completely randomly.
Pair Corralation between Jeju Semiconductor and BGF Retail
Assuming the 90 days trading horizon Jeju Semiconductor Corp is expected to under-perform the BGF Retail. In addition to that, Jeju Semiconductor is 1.13 times more volatile than BGF Retail Co. It trades about -0.48 of its total potential returns per unit of risk. BGF Retail Co is currently generating about -0.08 per unit of volatility. If you would invest 11,410,000 in BGF Retail Co on August 31, 2024 and sell it today you would lose (510,000) from holding BGF Retail Co or give up 4.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Semiconductor Corp vs. BGF Retail Co
Performance |
| Timeline |
| Jeju Semiconductor Corp |
| BGF Retail |
Jeju Semiconductor and BGF Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Semiconductor and BGF Retail
The main advantage of trading using opposite Jeju Semiconductor and BGF Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Semiconductor position performs unexpectedly, BGF Retail 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 BGF Retail will offset losses from the drop in BGF Retail'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 |
| BGF Retail vs. Korea Real Estate | BGF Retail vs. Korea Ratings Co | BGF Retail vs. IQuest Co | BGF Retail vs. Wonbang Tech 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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