Correlation Between Kolon Plastics and Jeju Semiconductor
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics and Jeju Semiconductor 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 Jeju Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and Jeju Semiconductor Corp, you can compare the effects of market volatilities on Kolon Plastics and Jeju Semiconductor 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 Jeju Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and Jeju Semiconductor.
Diversification Opportunities for Kolon Plastics and Jeju Semiconductor
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kolon and Jeju is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor Corp 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 Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of Kolon Plastics i.e., Kolon Plastics and Jeju Semiconductor go up and down completely randomly.
Pair Corralation between Kolon Plastics and Jeju Semiconductor
Assuming the 90 days trading horizon Kolon Plastics is expected to under-perform the Jeju Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Kolon Plastics is 5.71 times less risky than Jeju Semiconductor. The stock trades about -0.13 of its potential returns per unit of risk. The Jeju Semiconductor Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 991,000 in Jeju Semiconductor Corp on November 7, 2024 and sell it today you would earn a total of 415,000 from holding Jeju Semiconductor Corp or generate 41.88% 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. Jeju Semiconductor Corp
Performance |
| Timeline |
| Kolon Plastics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jeju Semiconductor Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Kolon Plastics and Jeju Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Plastics and Jeju Semiconductor
The main advantage of trading using opposite Kolon Plastics and Jeju Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics position performs unexpectedly, Jeju Semiconductor 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 Semiconductor will offset losses from the drop in Jeju Semiconductor's long position.| Kolon Plastics vs. Daewoo SBI SPAC | Kolon Plastics vs. Jahwa Electron | Kolon Plastics vs. Wonbang Tech Co |
| Jeju Semiconductor vs. People Technology | Jeju Semiconductor vs. SK Chemicals Co | Jeju Semiconductor vs. Asia Technology Co | Jeju Semiconductor vs. Digital Imaging Technology |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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