Correlation Between ENF Technology and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both ENF Technology 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 ENF Technology and Jeju Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENF Technology Co and Jeju Bank, you can compare the effects of market volatilities on ENF Technology 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 ENF Technology with a short position of Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENF Technology and Jeju Bank.
Diversification Opportunities for ENF Technology and Jeju Bank
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ENF and Jeju is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ENF Technology Co and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank and ENF Technology 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 ENF Technology 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 ENF Technology i.e., ENF Technology and Jeju Bank go up and down completely randomly.
Pair Corralation between ENF Technology and Jeju Bank
Assuming the 90 days trading horizon ENF Technology Co is expected to generate 1.41 times more return on investment than Jeju Bank. However, ENF Technology is 1.41 times more volatile than Jeju Bank. It trades about 0.35 of its potential returns per unit of risk. Jeju Bank is currently generating about 0.16 per unit of risk. If you would invest 1,640,030 in ENF Technology Co on October 12, 2024 and sell it today you would earn a total of 434,970 from holding ENF Technology Co or generate 26.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENF Technology Co vs. Jeju Bank
Performance |
| Timeline |
| ENF Technology |
| Jeju Bank |
ENF Technology and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENF Technology and Jeju Bank
The main advantage of trading using opposite ENF Technology and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENF Technology 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.| ENF Technology vs. Dongjin Semichem Co | ENF Technology vs. SS TECH | ENF Technology vs. Tokai Carbon Korea | ENF Technology vs. Soulbrain Holdings Co |
| Jeju Bank vs. iNtRON Biotechnology | Jeju Bank vs. ENF Technology Co | Jeju Bank vs. KG Eco Technology | Jeju Bank vs. Vina Technology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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