Correlation Between Jeju Air and SK Square
Can any of the company-specific risk be diversified away by investing in both Jeju Air and SK Square 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 SK Square 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 SK Square Co, you can compare the effects of market volatilities on Jeju Air and SK Square 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 SK Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and SK Square.
Diversification Opportunities for Jeju Air and SK Square
Average diversification
The 3 months correlation between Jeju and 402340 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and SK Square Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Square 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 SK Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Square has no effect on the direction of Jeju Air i.e., Jeju Air and SK Square go up and down completely randomly.
Pair Corralation between Jeju Air and SK Square
Assuming the 90 days trading horizon Jeju Air Co is expected to generate 0.44 times more return on investment than SK Square. However, Jeju Air Co is 2.27 times less risky than SK Square. It trades about 0.07 of its potential returns per unit of risk. SK Square Co is currently generating about -0.01 per unit of risk. If you would invest 912,000 in Jeju Air Co on September 3, 2024 and sell it today you would earn a total of 66,000 from holding Jeju Air Co or generate 7.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Jeju Air Co vs. SK Square Co
Performance |
Timeline |
Jeju Air |
SK Square |
Jeju Air and SK Square Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jeju Air and SK Square
The main advantage of trading using opposite Jeju Air and SK Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, SK Square 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 SK Square will offset losses from the drop in SK Square'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 |
SK Square vs. PI Advanced Materials | SK Square vs. Top Material Co | SK Square vs. Daewoo Engineering Construction | SK Square vs. Ssangyong Materials Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |