Correlation Between Jeju Air and Orbitech
Can any of the company-specific risk be diversified away by investing in both Jeju Air and Orbitech 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 Orbitech 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 Orbitech Co, you can compare the effects of market volatilities on Jeju Air and Orbitech 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 Orbitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and Orbitech.
Diversification Opportunities for Jeju Air and Orbitech
Weak diversification
The 3 months correlation between Jeju and Orbitech is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and Orbitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbitech 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 Orbitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbitech has no effect on the direction of Jeju Air i.e., Jeju Air and Orbitech go up and down completely randomly.
Pair Corralation between Jeju Air and Orbitech
Assuming the 90 days trading horizon Jeju Air Co is expected to under-perform the Orbitech. But the stock apears to be less risky and, when comparing its historical volatility, Jeju Air Co is 1.45 times less risky than Orbitech. The stock trades about -0.24 of its potential returns per unit of risk. The Orbitech Co is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 201,000 in Orbitech Co on October 20, 2024 and sell it today you would earn a total of 42,500 from holding Orbitech Co or generate 21.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Air Co vs. Orbitech Co
Performance |
| Timeline |
| Jeju Air |
| Orbitech |
Jeju Air and Orbitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and Orbitech
The main advantage of trading using opposite Jeju Air and Orbitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, Orbitech 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 Orbitech will offset losses from the drop in Orbitech's long position.| Jeju Air vs. Hyundai Industrial Co | Jeju Air vs. Asiana Airlines | Jeju Air vs. Ilji Technology Co | Jeju Air vs. DRB Industrial Co |
| Orbitech vs. SH Energy Chemical | Orbitech vs. Miwon Chemical | Orbitech vs. Sung Bo Chemicals | Orbitech vs. Daejung Chemicals Metals |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |