Correlation Between Daejung Chemicals and Jb Financial
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and Jb Financial 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 Daejung Chemicals and Jb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daejung Chemicals Metals and Jb Financial, you can compare the effects of market volatilities on Daejung Chemicals and Jb Financial 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 Daejung Chemicals with a short position of Jb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and Jb Financial.
Diversification Opportunities for Daejung Chemicals and Jb Financial
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Daejung and 175330 is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and Jb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jb Financial and Daejung Chemicals 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 Daejung Chemicals Metals are associated (or correlated) with Jb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jb Financial has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and Jb Financial go up and down completely randomly.
Pair Corralation between Daejung Chemicals and Jb Financial
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to under-perform the Jb Financial. In addition to that, Daejung Chemicals is 1.13 times more volatile than Jb Financial. It trades about -0.17 of its total potential returns per unit of risk. Jb Financial is currently generating about 0.03 per unit of volatility. If you would invest 1,827,000 in Jb Financial on August 27, 2024 and sell it today you would earn a total of 14,000 from holding Jb Financial or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. Jb Financial
Performance |
| Timeline |
| Daejung Chemicals Metals |
| Jb Financial |
Daejung Chemicals and Jb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and Jb Financial
The main advantage of trading using opposite Daejung Chemicals and Jb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, Jb Financial 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 Jb Financial will offset losses from the drop in Jb Financial's long position.| Daejung Chemicals vs. LG Chem | Daejung Chemicals vs. LIG ES SPAC | Daejung Chemicals vs. Youngchang Chemical Co |
| Jb Financial vs. Korea New Network | Jb Financial vs. Dong A Eltek | Jb Financial vs. Dreamus Company | Jb Financial vs. SK Bioscience 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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