Correlation Between Kolon Plastics and Jinro Distillers
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics and Jinro Distillers 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 Kolon Plastics and Jinro Distillers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and Jinro Distillers Co, you can compare the effects of market volatilities on Kolon Plastics and Jinro Distillers 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 Kolon Plastics with a short position of Jinro Distillers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and Jinro Distillers.
Diversification Opportunities for Kolon Plastics and Jinro Distillers
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kolon and Jinro is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics and Jinro Distillers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinro Distillers and Kolon Plastics 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 Kolon Plastics are associated (or correlated) with Jinro Distillers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinro Distillers has no effect on the direction of Kolon Plastics i.e., Kolon Plastics and Jinro Distillers go up and down completely randomly.
Pair Corralation between Kolon Plastics and Jinro Distillers
Assuming the 90 days trading horizon Kolon Plastics is expected to generate 2.72 times more return on investment than Jinro Distillers. However, Kolon Plastics is 2.72 times more volatile than Jinro Distillers Co. It trades about 0.09 of its potential returns per unit of risk. Jinro Distillers Co is currently generating about 0.2 per unit of risk. If you would invest 530,000 in Kolon Plastics on October 28, 2024 and sell it today you would earn a total of 12,000 from holding Kolon Plastics or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Plastics vs. Jinro Distillers Co
Performance |
| Timeline |
| Kolon Plastics |
| Jinro Distillers |
Kolon Plastics and Jinro Distillers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Plastics and Jinro Distillers
The main advantage of trading using opposite Kolon Plastics and Jinro Distillers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics position performs unexpectedly, Jinro Distillers 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 Jinro Distillers will offset losses from the drop in Jinro Distillers' long position.| Kolon Plastics vs. KB Financial Group | Kolon Plastics vs. Shinhan Financial Group | Kolon Plastics vs. Hana Financial | Kolon Plastics vs. Woori Financial Group |
| Jinro Distillers vs. FNSTech Co | Jinro Distillers vs. Daejung Chemicals Metals | Jinro Distillers vs. Heungkuk Metaltech CoLtd | Jinro Distillers vs. Lion Chemtech 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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