Correlation Between Jeju Air and Tae Kyung
Can any of the company-specific risk be diversified away by investing in both Jeju Air and Tae Kyung 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 Tae Kyung 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 Tae Kyung Chemical, you can compare the effects of market volatilities on Jeju Air and Tae Kyung 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 Tae Kyung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and Tae Kyung.
Diversification Opportunities for Jeju Air and Tae Kyung
Very good diversification
The 3 months correlation between Jeju and Tae is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and Tae Kyung Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tae Kyung Chemical 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 Tae Kyung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tae Kyung Chemical has no effect on the direction of Jeju Air i.e., Jeju Air and Tae Kyung go up and down completely randomly.
Pair Corralation between Jeju Air and Tae Kyung
Assuming the 90 days trading horizon Jeju Air Co is expected to under-perform the Tae Kyung. But the stock apears to be less risky and, when comparing its historical volatility, Jeju Air Co is 1.5 times less risky than Tae Kyung. The stock trades about -0.2 of its potential returns per unit of risk. The Tae Kyung Chemical is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,122,000 in Tae Kyung Chemical on November 7, 2024 and sell it today you would lose (16,000) from holding Tae Kyung Chemical or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Air Co vs. Tae Kyung Chemical
Performance |
| Timeline |
| Jeju Air |
| Tae Kyung Chemical |
Jeju Air and Tae Kyung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and Tae Kyung
The main advantage of trading using opposite Jeju Air and Tae Kyung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, Tae Kyung 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 Tae Kyung will offset losses from the drop in Tae Kyung's long position.| Jeju Air vs. Daiyang Metal Co | Jeju Air vs. Hanjoo Light Metal | Jeju Air vs. PJ Metal Co | Jeju Air vs. Coloray International Investment |
| Tae Kyung vs. AptaBio Therapeutics | Tae Kyung vs. Daewoo SBI SPAC | Tae Kyung vs. Dream Security co | Tae Kyung vs. Microfriend |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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