Correlation Between ITM Semiconductor and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor and Jeju Beer 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 ITM Semiconductor and Jeju Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Semiconductor Co and Jeju Beer Co, you can compare the effects of market volatilities on ITM Semiconductor and Jeju Beer 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 ITM Semiconductor with a short position of Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and Jeju Beer.
Diversification Opportunities for ITM Semiconductor and Jeju Beer
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between ITM and Jeju is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor Co and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer and ITM 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 ITM Semiconductor Co are associated (or correlated) with Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of ITM Semiconductor i.e., ITM Semiconductor and Jeju Beer go up and down completely randomly.
Pair Corralation between ITM Semiconductor and Jeju Beer
Assuming the 90 days trading horizon ITM Semiconductor Co is expected to under-perform the Jeju Beer. But the stock apears to be less risky and, when comparing its historical volatility, ITM Semiconductor Co is 1.49 times less risky than Jeju Beer. The stock trades about -0.31 of its potential returns per unit of risk. The Jeju Beer Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 320,000 in Jeju Beer Co on August 30, 2024 and sell it today you would lose (5,500) from holding Jeju Beer Co or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITM Semiconductor Co vs. Jeju Beer Co
Performance |
| Timeline |
| ITM Semiconductor |
| Jeju Beer |
ITM Semiconductor and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Semiconductor and Jeju Beer
The main advantage of trading using opposite ITM Semiconductor and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer's long position.| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. LX Semicon Co | ITM Semiconductor vs. People Technology | ITM Semiconductor vs. Hana Materials |
| Jeju Beer vs. Sangsin Energy Display | Jeju Beer vs. Cots Technology Co | Jeju Beer vs. Eugene Technology CoLtd | Jeju Beer vs. People Technology |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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