Correlation Between DRB Industrial and Jin Air
Can any of the company-specific risk be diversified away by investing in both DRB Industrial and Jin Air 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 DRB Industrial and Jin Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DRB Industrial Co and Jin Air Co, you can compare the effects of market volatilities on DRB Industrial and Jin Air 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 DRB Industrial with a short position of Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRB Industrial and Jin Air.
Diversification Opportunities for DRB Industrial and Jin Air
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DRB and Jin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding DRB Industrial Co and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air and DRB Industrial 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 DRB Industrial Co are associated (or correlated) with Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of DRB Industrial i.e., DRB Industrial and Jin Air go up and down completely randomly.
Pair Corralation between DRB Industrial and Jin Air
Assuming the 90 days trading horizon DRB Industrial Co is expected to generate 0.94 times more return on investment than Jin Air. However, DRB Industrial Co is 1.06 times less risky than Jin Air. It trades about -0.1 of its potential returns per unit of risk. Jin Air Co is currently generating about -0.1 per unit of risk. If you would invest 820,761 in DRB Industrial Co on November 6, 2024 and sell it today you would lose (126,761) from holding DRB Industrial Co or give up 15.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DRB Industrial Co vs. Jin Air Co
Performance |
| Timeline |
| DRB Industrial |
| Jin Air |
DRB Industrial and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DRB Industrial and Jin Air
The main advantage of trading using opposite DRB Industrial and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRB Industrial position performs unexpectedly, Jin Air 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 Jin Air will offset losses from the drop in Jin Air's long position.| DRB Industrial vs. Sejong Telecom | DRB Industrial vs. Youngsin Metal Industrial | DRB Industrial vs. Kukil Metal Co | DRB Industrial vs. Digital Power Communications |
| Jin Air vs. Seers Technology | Jin Air vs. SK Chemicals Co | Jin Air vs. Ilji Technology Co | Jin Air vs. Guyoung Technology 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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