Correlation Between Tamul Multimedia and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Tamul Multimedia and Jeju Bank 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 Tamul Multimedia and Jeju Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tamul Multimedia Co and Jeju Bank, you can compare the effects of market volatilities on Tamul Multimedia and Jeju Bank 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 Tamul Multimedia with a short position of Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamul Multimedia and Jeju Bank.
Diversification Opportunities for Tamul Multimedia and Jeju Bank
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tamul and Jeju is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Tamul Multimedia Co and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank and Tamul Multimedia 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 Tamul Multimedia Co are associated (or correlated) with Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Tamul Multimedia i.e., Tamul Multimedia and Jeju Bank go up and down completely randomly.
Pair Corralation between Tamul Multimedia and Jeju Bank
Assuming the 90 days trading horizon Tamul Multimedia is expected to generate 2.09 times less return on investment than Jeju Bank. But when comparing it to its historical volatility, Tamul Multimedia Co is 1.34 times less risky than Jeju Bank. It trades about 0.01 of its potential returns per unit of risk. Jeju Bank is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 963,341 in Jeju Bank on August 29, 2024 and sell it today you would lose (151,341) from holding Jeju Bank or give up 15.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tamul Multimedia Co vs. Jeju Bank
Performance |
| Timeline |
| Tamul Multimedia |
| Jeju Bank |
Tamul Multimedia and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tamul Multimedia and Jeju Bank
The main advantage of trading using opposite Tamul Multimedia and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamul Multimedia position performs unexpectedly, Jeju Bank 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 Bank will offset losses from the drop in Jeju Bank's long position.| Tamul Multimedia vs. SK Hynix | Tamul Multimedia vs. LX Semicon Co | Tamul Multimedia vs. Tokai Carbon Korea | Tamul Multimedia vs. People Technology |
| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Daewoo SBI SPAC | Jeju Bank vs. Dream Security co | Jeju Bank vs. Microfriend |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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