Correlation Between Jeju Air and CJ CheilJedang
Can any of the company-specific risk be diversified away by investing in both Jeju Air and CJ CheilJedang 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 CJ CheilJedang 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 CJ CheilJedang Corp, you can compare the effects of market volatilities on Jeju Air and CJ CheilJedang 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 CJ CheilJedang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and CJ CheilJedang.
Diversification Opportunities for Jeju Air and CJ CheilJedang
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jeju and 097955 is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and CJ CheilJedang Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CJ CheilJedang Corp 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 CJ CheilJedang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CJ CheilJedang Corp has no effect on the direction of Jeju Air i.e., Jeju Air and CJ CheilJedang go up and down completely randomly.
Pair Corralation between Jeju Air and CJ CheilJedang
Assuming the 90 days trading horizon Jeju Air Co is expected to generate 1.55 times more return on investment than CJ CheilJedang. However, Jeju Air is 1.55 times more volatile than CJ CheilJedang Corp. It trades about 0.13 of its potential returns per unit of risk. CJ CheilJedang Corp is currently generating about -0.05 per unit of risk. If you would invest 885,000 in Jeju Air Co on September 3, 2024 and sell it today you would earn a total of 93,000 from holding Jeju Air Co or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Air Co vs. CJ CheilJedang Corp
Performance |
| Timeline |
| Jeju Air |
| CJ CheilJedang Corp |
Jeju Air and CJ CheilJedang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and CJ CheilJedang
The main advantage of trading using opposite Jeju Air and CJ CheilJedang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, CJ CheilJedang 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 CJ CheilJedang will offset losses from the drop in CJ CheilJedang's long position.| Jeju Air vs. LG Display | Jeju Air vs. Hyundai Motor | Jeju Air vs. Hyundai Motor Co | Jeju Air vs. Hyundai Motor Co |
| CJ CheilJedang vs. Korea Information Communications | CJ CheilJedang vs. Nice Information Telecommunication | CJ CheilJedang vs. Alton Sports CoLtd | CJ CheilJedang vs. Kisan Telecom 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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