Correlation Between Jeju Air and Hankukpackage
Can any of the company-specific risk be diversified away by investing in both Jeju Air and Hankukpackage 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 Hankukpackage 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 Hankukpackage Co, you can compare the effects of market volatilities on Jeju Air and Hankukpackage 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 Hankukpackage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and Hankukpackage.
Diversification Opportunities for Jeju Air and Hankukpackage
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jeju and Hankukpackage is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and Hankukpackage Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankukpackage 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 Hankukpackage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankukpackage has no effect on the direction of Jeju Air i.e., Jeju Air and Hankukpackage go up and down completely randomly.
Pair Corralation between Jeju Air and Hankukpackage
Assuming the 90 days trading horizon Jeju Air Co is expected to under-perform the Hankukpackage. In addition to that, Jeju Air is 1.08 times more volatile than Hankukpackage Co. It trades about -0.05 of its total potential returns per unit of risk. Hankukpackage Co is currently generating about 0.0 per unit of volatility. If you would invest 196,500 in Hankukpackage Co on September 14, 2024 and sell it today you would lose (4,500) from holding Hankukpackage Co or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Jeju Air Co vs. Hankukpackage Co
Performance |
| Timeline |
| Jeju Air |
| Hankukpackage |
Jeju Air and Hankukpackage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and Hankukpackage
The main advantage of trading using opposite Jeju Air and Hankukpackage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, Hankukpackage 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 Hankukpackage will offset losses from the drop in Hankukpackage'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 |
| Hankukpackage vs. Solution Advanced Technology | Hankukpackage vs. Busan Industrial Co | Hankukpackage vs. Busan Ind | Hankukpackage vs. Sam Chun Dang |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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