Correlation Between Lion Chemtech and Jeju Air
Can any of the company-specific risk be diversified away by investing in both Lion Chemtech and Jeju 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 Lion Chemtech and Jeju Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Chemtech Co and Jeju Air Co, you can compare the effects of market volatilities on Lion Chemtech and Jeju 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 Lion Chemtech with a short position of Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Chemtech and Jeju Air.
Diversification Opportunities for Lion Chemtech and Jeju Air
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lion and Jeju is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lion Chemtech Co and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air and Lion Chemtech 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 Lion Chemtech Co are associated (or correlated) with Jeju Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Air has no effect on the direction of Lion Chemtech i.e., Lion Chemtech and Jeju Air go up and down completely randomly.
Pair Corralation between Lion Chemtech and Jeju Air
Assuming the 90 days trading horizon Lion Chemtech Co is expected to generate 1.55 times more return on investment than Jeju Air. However, Lion Chemtech is 1.55 times more volatile than Jeju Air Co. It trades about 0.07 of its potential returns per unit of risk. Jeju Air Co is currently generating about -0.09 per unit of risk. If you would invest 209,838 in Lion Chemtech Co on November 2, 2024 and sell it today you would earn a total of 37,162 from holding Lion Chemtech Co or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Chemtech Co vs. Jeju Air Co
Performance |
| Timeline |
| Lion Chemtech |
| Jeju Air |
Lion Chemtech and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Chemtech and Jeju Air
The main advantage of trading using opposite Lion Chemtech and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Chemtech position performs unexpectedly, Jeju 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 Jeju Air will offset losses from the drop in Jeju Air's long position.| Lion Chemtech vs. Dongnam Chemical Co | Lion Chemtech vs. Hanjoo Light Metal | Lion Chemtech vs. Kbi Metal Co | Lion Chemtech vs. Daewon Chemical Co |
| Jeju Air vs. Display Tech Co | Jeju Air vs. Lee Ku Industrial | Jeju Air vs. LEENO Industrial | Jeju Air vs. Nice Information Telecommunication |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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