Correlation Between Jeju Air and Shinil Electronics
Can any of the company-specific risk be diversified away by investing in both Jeju Air and Shinil Electronics 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 Air and Shinil Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Air Co and Shinil Electronics Co, you can compare the effects of market volatilities on Jeju Air and Shinil Electronics 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 Air with a short position of Shinil Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and Shinil Electronics.
Diversification Opportunities for Jeju Air and Shinil Electronics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jeju and Shinil is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and Shinil Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Electronics and Jeju Air 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 Air Co are associated (or correlated) with Shinil Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Electronics has no effect on the direction of Jeju Air i.e., Jeju Air and Shinil Electronics go up and down completely randomly.
Pair Corralation between Jeju Air and Shinil Electronics
Assuming the 90 days trading horizon Jeju Air Co is expected to under-perform the Shinil Electronics. In addition to that, Jeju Air is 1.5 times more volatile than Shinil Electronics Co. It trades about -0.27 of its total potential returns per unit of risk. Shinil Electronics Co is currently generating about -0.04 per unit of volatility. If you would invest 145,500 in Shinil Electronics Co on October 30, 2024 and sell it today you would lose (4,800) from holding Shinil Electronics Co or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Air Co vs. Shinil Electronics Co
Performance |
| Timeline |
| Jeju Air |
| Shinil Electronics |
Jeju Air and Shinil Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and Shinil Electronics
The main advantage of trading using opposite Jeju Air and Shinil Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, Shinil Electronics 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 Shinil Electronics will offset losses from the drop in Shinil Electronics' long position.| Jeju Air vs. Daewon Chemical Co | Jeju Air vs. E Investment Development | Jeju Air vs. Hanwha Chemical Corp | Jeju Air vs. KTB Investment Securities |
| Shinil Electronics vs. Daewon Chemical Co | Shinil Electronics vs. LG Household Healthcare | Shinil Electronics vs. Sung Bo Chemicals | Shinil Electronics vs. Daejung Chemicals Metals |
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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