Correlation Between Pyung Hwa and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Pyung Hwa and Jeju Beer 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 Pyung Hwa and Jeju Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pyung Hwa Industrial and Jeju Beer Co, you can compare the effects of market volatilities on Pyung Hwa and Jeju Beer 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 Pyung Hwa with a short position of Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pyung Hwa and Jeju Beer.
Diversification Opportunities for Pyung Hwa and Jeju Beer
Very good diversification
The 3 months correlation between Pyung and Jeju is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pyung Hwa Industrial and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer and Pyung Hwa 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 Pyung Hwa Industrial are associated (or correlated) with Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Pyung Hwa i.e., Pyung Hwa and Jeju Beer go up and down completely randomly.
Pair Corralation between Pyung Hwa and Jeju Beer
Assuming the 90 days trading horizon Pyung Hwa Industrial is expected to generate 0.57 times more return on investment than Jeju Beer. However, Pyung Hwa Industrial is 1.76 times less risky than Jeju Beer. It trades about -0.01 of its potential returns per unit of risk. Jeju Beer Co is currently generating about -0.03 per unit of risk. If you would invest 125,100 in Pyung Hwa Industrial on October 16, 2024 and sell it today you would lose (24,800) from holding Pyung Hwa Industrial or give up 19.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pyung Hwa Industrial vs. Jeju Beer Co
Performance |
| Timeline |
| Pyung Hwa Industrial |
| Jeju Beer |
Pyung Hwa and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pyung Hwa and Jeju Beer
The main advantage of trading using opposite Pyung Hwa and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyung Hwa position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer's long position.| Pyung Hwa vs. Cuckoo Electronics Co | Pyung Hwa vs. Samyoung Electronics Co | Pyung Hwa vs. Mirai Semiconductors Co | Pyung Hwa vs. Haitai Confectionery Foods |
| Jeju Beer vs. Eagon Industrial Co | Jeju Beer vs. KB Financial Group | Jeju Beer vs. Daejung Chemicals Metals | Jeju Beer vs. Pyung Hwa Industrial |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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