Correlation Between Jeju Air and Barunson Entertainment
Can any of the company-specific risk be diversified away by investing in both Jeju Air and Barunson Entertainment 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 Barunson Entertainment 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 Barunson Entertainment Arts, you can compare the effects of market volatilities on Jeju Air and Barunson Entertainment 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 Barunson Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and Barunson Entertainment.
Diversification Opportunities for Jeju Air and Barunson Entertainment
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jeju and Barunson is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and Barunson Entertainment Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barunson Entertainment 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 Barunson Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barunson Entertainment has no effect on the direction of Jeju Air i.e., Jeju Air and Barunson Entertainment go up and down completely randomly.
Pair Corralation between Jeju Air and Barunson Entertainment
Assuming the 90 days trading horizon Jeju Air Co is expected to under-perform the Barunson Entertainment. In addition to that, Jeju Air is 1.06 times more volatile than Barunson Entertainment Arts. It trades about -0.2 of its total potential returns per unit of risk. Barunson Entertainment Arts is currently generating about 0.07 per unit of volatility. If you would invest 42,900 in Barunson Entertainment Arts on November 7, 2024 and sell it today you would earn a total of 600.00 from holding Barunson Entertainment Arts or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Jeju Air Co vs. Barunson Entertainment Arts
Performance |
| Timeline |
| Jeju Air |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Barunson Entertainment |
Jeju Air and Barunson Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and Barunson Entertainment
The main advantage of trading using opposite Jeju Air and Barunson Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, Barunson Entertainment 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 Barunson Entertainment will offset losses from the drop in Barunson Entertainment's long position.| Jeju Air vs. SKONEC Entertainment Co | Jeju Air vs. Daehan Synthetic Fiber | Jeju Air vs. ISU Chemical Co | Jeju Air vs. Posco Chemical Co |
| Barunson Entertainment vs. Hana Financial | Barunson Entertainment vs. Heungkuk Metaltech CoLtd | Barunson Entertainment vs. Next Entertainment World | Barunson Entertainment vs. Cuckoo Electronics 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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