Correlation Between ABOV Semiconductor and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both ABOV Semiconductor 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 ABOV Semiconductor and Jeju Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABOV Semiconductor Co and Jeju Bank, you can compare the effects of market volatilities on ABOV Semiconductor 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 ABOV Semiconductor with a short position of Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABOV Semiconductor and Jeju Bank.
Diversification Opportunities for ABOV Semiconductor and Jeju Bank
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ABOV and Jeju is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding ABOV Semiconductor Co and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank and ABOV Semiconductor 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 ABOV Semiconductor 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 ABOV Semiconductor i.e., ABOV Semiconductor and Jeju Bank go up and down completely randomly.
Pair Corralation between ABOV Semiconductor and Jeju Bank
Assuming the 90 days trading horizon ABOV Semiconductor Co is expected to under-perform the Jeju Bank. In addition to that, ABOV Semiconductor is 1.33 times more volatile than Jeju Bank. It trades about -0.1 of its total potential returns per unit of risk. Jeju Bank is currently generating about -0.06 per unit of volatility. If you would invest 801,000 in Jeju Bank on September 13, 2024 and sell it today you would lose (37,000) from holding Jeju Bank or give up 4.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABOV Semiconductor Co vs. Jeju Bank
Performance |
| Timeline |
| ABOV Semiconductor |
| Jeju Bank |
ABOV Semiconductor and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABOV Semiconductor and Jeju Bank
The main advantage of trading using opposite ABOV Semiconductor and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABOV Semiconductor 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.| ABOV Semiconductor vs. Cube Entertainment | ABOV Semiconductor vs. Dreamus Company | ABOV Semiconductor vs. LG Energy Solution | ABOV Semiconductor vs. Dongwon System |
| Jeju Bank vs. Samsung Electronics Co | Jeju Bank vs. Samsung Electronics Co | Jeju Bank vs. SK Hynix | Jeju Bank vs. POSCO Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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