Correlation Between JC Chemical and Korea Information
Can any of the company-specific risk be diversified away by investing in both JC Chemical and Korea Information 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 JC Chemical and Korea Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JC Chemical Co and Korea Information Communications, you can compare the effects of market volatilities on JC Chemical and Korea Information 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 JC Chemical with a short position of Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Chemical and Korea Information.
Diversification Opportunities for JC Chemical and Korea Information
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 137950 and Korea is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding JC Chemical Co and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information and JC Chemical 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 JC Chemical Co are associated (or correlated) with Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of JC Chemical i.e., JC Chemical and Korea Information go up and down completely randomly.
Pair Corralation between JC Chemical and Korea Information
Assuming the 90 days trading horizon JC Chemical Co is expected to under-perform the Korea Information. In addition to that, JC Chemical is 1.03 times more volatile than Korea Information Communications. It trades about -0.04 of its total potential returns per unit of risk. Korea Information Communications is currently generating about -0.03 per unit of volatility. If you would invest 1,276,000 in Korea Information Communications on October 17, 2024 and sell it today you would lose (460,000) from holding Korea Information Communications or give up 36.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Chemical Co vs. Korea Information Communicatio
Performance |
| Timeline |
| JC Chemical |
| Korea Information |
JC Chemical and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Chemical and Korea Information
The main advantage of trading using opposite JC Chemical and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Chemical position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| JC Chemical vs. Echomarketing CoLtd | JC Chemical vs. Daejoo Electronic Materials | JC Chemical vs. KB Financial Group | JC Chemical vs. Shinil Electronics Co |
| Korea Information vs. JC Chemical Co | Korea Information vs. Youl Chon Chemical | Korea Information vs. Youngchang Chemical Co | Korea Information vs. Korea Petro Chemical |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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