Correlation Between Jeju Air and GS Retail
Can any of the company-specific risk be diversified away by investing in both Jeju Air and GS 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 Air and GS Retail 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 GS Retail Co, you can compare the effects of market volatilities on Jeju Air and GS 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 Air with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and GS Retail.
Diversification Opportunities for Jeju Air and GS Retail
Weak diversification
The 3 months correlation between Jeju and 007070 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail 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 GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Jeju Air i.e., Jeju Air and GS Retail go up and down completely randomly.
Pair Corralation between Jeju Air and GS Retail
Assuming the 90 days trading horizon Jeju Air is expected to generate 1.15 times less return on investment than GS Retail. In addition to that, Jeju Air is 1.11 times more volatile than GS Retail Co. It trades about 0.13 of its total potential returns per unit of risk. GS Retail Co is currently generating about 0.17 per unit of volatility. If you would invest 2,070,000 in GS Retail Co on September 3, 2024 and sell it today you would earn a total of 245,000 from holding GS Retail Co or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.12% |
| Values | Daily Returns |
Jeju Air Co vs. GS Retail Co
Performance |
| Timeline |
| Jeju Air |
| GS Retail |
Jeju Air and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and GS Retail
The main advantage of trading using opposite Jeju Air and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, GS 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 GS Retail will offset losses from the drop in GS Retail's long position.| Jeju Air vs. LG Display | Jeju Air vs. Hyundai Motor | Jeju Air vs. Hyundai Motor Co | Jeju Air vs. Hyundai Motor Co |
| GS Retail vs. CU Medical Systems | GS Retail vs. Daejung Chemicals Metals | GS Retail vs. Alton Sports CoLtd | GS Retail vs. Hannong Chemicals |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |