Correlation Between Jeju Air and Samlip General
Can any of the company-specific risk be diversified away by investing in both Jeju Air and Samlip General 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 Samlip General 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 Samlip General Foods, you can compare the effects of market volatilities on Jeju Air and Samlip General 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 Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and Samlip General.
Diversification Opportunities for Jeju Air and Samlip General
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jeju and Samlip is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods 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 Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of Jeju Air i.e., Jeju Air and Samlip General go up and down completely randomly.
Pair Corralation between Jeju Air and Samlip General
Assuming the 90 days trading horizon Jeju Air Co is expected to under-perform the Samlip General. In addition to that, Jeju Air is 1.47 times more volatile than Samlip General Foods. It trades about -0.07 of its total potential returns per unit of risk. Samlip General Foods is currently generating about -0.03 per unit of volatility. If you would invest 6,697,703 in Samlip General Foods on October 13, 2024 and sell it today you would lose (1,617,703) from holding Samlip General Foods or give up 24.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Jeju Air Co vs. Samlip General Foods
Performance |
| Timeline |
| Jeju Air |
| Samlip General Foods |
Jeju Air and Samlip General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and Samlip General
The main advantage of trading using opposite Jeju Air and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.| Jeju Air vs. Jinro Distillers Co | Jeju Air vs. Alton Sports CoLtd | Jeju Air vs. Korea Alcohol Industrial | Jeju Air vs. Samyang Foods Co |
| Samlip General vs. TOPMATERIAL LTD | Samlip General vs. INNOX Advanced Materials | Samlip General vs. Daejoo Electronic Materials | Samlip General vs. ITM Semiconductor 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 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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