Correlation Between Jeju Air and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both Jeju Air and Hansol Homedeco 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 Hansol Homedeco 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 Hansol Homedeco Co, you can compare the effects of market volatilities on Jeju Air and Hansol Homedeco 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 Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and Hansol Homedeco.
Diversification Opportunities for Jeju Air and Hansol Homedeco
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jeju and Hansol is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco 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 Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of Jeju Air i.e., Jeju Air and Hansol Homedeco go up and down completely randomly.
Pair Corralation between Jeju Air and Hansol Homedeco
Assuming the 90 days trading horizon Jeju Air Co is expected to generate 1.35 times more return on investment than Hansol Homedeco. However, Jeju Air is 1.35 times more volatile than Hansol Homedeco Co. It trades about 0.15 of its potential returns per unit of risk. Hansol Homedeco Co is currently generating about -0.1 per unit of risk. If you would invest 894,000 in Jeju Air Co on August 29, 2024 and sell it today you would earn a total of 67,000 from holding Jeju Air Co or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Air Co vs. Hansol Homedeco Co
Performance |
| Timeline |
| Jeju Air |
| Hansol Homedeco |
Jeju Air and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and Hansol Homedeco
The main advantage of trading using opposite Jeju Air and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| Jeju Air vs. Samsung Electronics Co | Jeju Air vs. Samsung Electronics Co | Jeju Air vs. Hyundai Motor Co | Jeju Air vs. Hyundai Motor |
| Hansol Homedeco vs. AptaBio Therapeutics | Hansol Homedeco vs. Daewoo SBI SPAC | Hansol Homedeco vs. Dream Security co | Hansol Homedeco 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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