Correlation Between JNK Heaters and Poongsan
Can any of the company-specific risk be diversified away by investing in both JNK Heaters and Poongsan 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 JNK Heaters and Poongsan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JNK Heaters Co and Poongsan, you can compare the effects of market volatilities on JNK Heaters and Poongsan 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 JNK Heaters with a short position of Poongsan. Check out your portfolio center. Please also check ongoing floating volatility patterns of JNK Heaters and Poongsan.
Diversification Opportunities for JNK Heaters and Poongsan
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JNK and Poongsan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding JNK Heaters Co and Poongsan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poongsan and JNK Heaters 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 JNK Heaters Co are associated (or correlated) with Poongsan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poongsan has no effect on the direction of JNK Heaters i.e., JNK Heaters and Poongsan go up and down completely randomly.
Pair Corralation between JNK Heaters and Poongsan
Assuming the 90 days trading horizon JNK Heaters Co is expected to generate 0.78 times more return on investment than Poongsan. However, JNK Heaters Co is 1.29 times less risky than Poongsan. It trades about 0.02 of its potential returns per unit of risk. Poongsan is currently generating about -0.05 per unit of risk. If you would invest 353,000 in JNK Heaters Co on November 2, 2024 and sell it today you would earn a total of 10,500 from holding JNK Heaters Co or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JNK Heaters Co vs. Poongsan
Performance |
| Timeline |
| JNK Heaters |
| Poongsan |
JNK Heaters and Poongsan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JNK Heaters and Poongsan
The main advantage of trading using opposite JNK Heaters and Poongsan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JNK Heaters position performs unexpectedly, Poongsan 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 Poongsan will offset losses from the drop in Poongsan's long position.| JNK Heaters vs. Jeju Beer Co | JNK Heaters vs. Seoul Semiconductor Co | JNK Heaters vs. BGF Retail Co | JNK Heaters vs. LG Household Healthcare |
| Poongsan vs. Top Material Co | Poongsan vs. Woori Technology | Poongsan vs. Ewon Comfortech Co | Poongsan vs. Hyosung Advanced Materials |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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