Correlation Between Jeju Air and Amogreentech
Can any of the company-specific risk be diversified away by investing in both Jeju Air and Amogreentech 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 Amogreentech 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 Amogreentech Co, you can compare the effects of market volatilities on Jeju Air and Amogreentech 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 Amogreentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and Amogreentech.
Diversification Opportunities for Jeju Air and Amogreentech
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jeju and Amogreentech is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and Amogreentech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech 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 Amogreentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech has no effect on the direction of Jeju Air i.e., Jeju Air and Amogreentech go up and down completely randomly.
Pair Corralation between Jeju Air and Amogreentech
Assuming the 90 days trading horizon Jeju Air Co is expected to under-perform the Amogreentech. In addition to that, Jeju Air is 1.32 times more volatile than Amogreentech Co. It trades about -0.24 of its total potential returns per unit of risk. Amogreentech Co is currently generating about 0.01 per unit of volatility. If you would invest 608,000 in Amogreentech Co on October 20, 2024 and sell it today you would earn a total of 1,000.00 from holding Amogreentech Co or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Air Co vs. Amogreentech Co
Performance |
| Timeline |
| Jeju Air |
| Amogreentech |
Jeju Air and Amogreentech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and Amogreentech
The main advantage of trading using opposite Jeju Air and Amogreentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, Amogreentech 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 Amogreentech will offset losses from the drop in Amogreentech'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 |
| Amogreentech vs. RF Materials Co | Amogreentech vs. Solus Advanced Materials | Amogreentech vs. Youngsin Metal Industrial | Amogreentech vs. Hanjin Transportation 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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