Correlation Between Jeju Air and SCI Information
Can any of the company-specific risk be diversified away by investing in both Jeju Air and SCI Information 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 SCI Information 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 SCI Information Service, you can compare the effects of market volatilities on Jeju Air and SCI Information 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 SCI Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and SCI Information.
Diversification Opportunities for Jeju Air and SCI Information
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jeju and SCI is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service 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 SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of Jeju Air i.e., Jeju Air and SCI Information go up and down completely randomly.
Pair Corralation between Jeju Air and SCI Information
Assuming the 90 days trading horizon Jeju Air Co is expected to generate 0.73 times more return on investment than SCI Information. However, Jeju Air Co is 1.37 times less risky than SCI Information. It trades about -0.01 of its potential returns per unit of risk. SCI Information Service is currently generating about -0.23 per unit of risk. If you would invest 740,000 in Jeju Air Co on November 4, 2024 and sell it today you would lose (2,000) from holding Jeju Air Co or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Air Co vs. SCI Information Service
Performance |
| Timeline |
| Jeju Air |
| SCI Information Service |
Jeju Air and SCI Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and SCI Information
The main advantage of trading using opposite Jeju Air and SCI Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, SCI Information 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 SCI Information will offset losses from the drop in SCI Information's long position.| Jeju Air vs. Woori Technology Investment | Jeju Air vs. LG Household Healthcare | Jeju Air vs. Infinitt Healthcare Co | Jeju Air vs. Samyang Foods Co |
| SCI Information vs. Samick Musical Instruments | SCI Information vs. Formetal Co | SCI Information vs. Jeju Beer Co | SCI Information vs. Innowireless 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |