Correlation Between Jeju Air and Shinsegae Food
Can any of the company-specific risk be diversified away by investing in both Jeju Air and Shinsegae Food 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 Shinsegae Food 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 Shinsegae Food, you can compare the effects of market volatilities on Jeju Air and Shinsegae Food 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 Shinsegae Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and Shinsegae Food.
Diversification Opportunities for Jeju Air and Shinsegae Food
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jeju and Shinsegae is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and Shinsegae Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Food 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 Shinsegae Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Food has no effect on the direction of Jeju Air i.e., Jeju Air and Shinsegae Food go up and down completely randomly.
Pair Corralation between Jeju Air and Shinsegae Food
Assuming the 90 days trading horizon Jeju Air Co is expected to under-perform the Shinsegae Food. In addition to that, Jeju Air is 1.22 times more volatile than Shinsegae Food. It trades about -0.06 of its total potential returns per unit of risk. Shinsegae Food is currently generating about -0.05 per unit of volatility. If you would invest 3,882,251 in Shinsegae Food on September 12, 2024 and sell it today you would lose (777,251) from holding Shinsegae Food or give up 20.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Air Co vs. Shinsegae Food
Performance |
| Timeline |
| Jeju Air |
| Shinsegae Food |
Jeju Air and Shinsegae Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and Shinsegae Food
The main advantage of trading using opposite Jeju Air and Shinsegae Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, Shinsegae Food 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 Shinsegae Food will offset losses from the drop in Shinsegae Food's long position.| Jeju Air vs. Korea New Network | Jeju Air vs. Solution Advanced Technology | Jeju Air vs. Busan Industrial Co | Jeju Air vs. Busan Ind |
| Shinsegae Food vs. Daou Data Corp | Shinsegae Food vs. Solution Advanced Technology | Shinsegae Food vs. Busan Industrial Co | Shinsegae Food vs. Busan Ind |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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