Correlation Between Jb Financial and Hankook Furniture
Can any of the company-specific risk be diversified away by investing in both Jb Financial and Hankook Furniture 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 Jb Financial and Hankook Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jb Financial and Hankook Furniture Co, you can compare the effects of market volatilities on Jb Financial and Hankook Furniture 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 Jb Financial with a short position of Hankook Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jb Financial and Hankook Furniture.
Diversification Opportunities for Jb Financial and Hankook Furniture
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 175330 and Hankook is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Hankook Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Furniture and Jb Financial 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 Jb Financial are associated (or correlated) with Hankook Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Furniture has no effect on the direction of Jb Financial i.e., Jb Financial and Hankook Furniture go up and down completely randomly.
Pair Corralation between Jb Financial and Hankook Furniture
Assuming the 90 days trading horizon Jb Financial is expected to under-perform the Hankook Furniture. But the stock apears to be less risky and, when comparing its historical volatility, Jb Financial is 1.02 times less risky than Hankook Furniture. The stock trades about -0.23 of its potential returns per unit of risk. The Hankook Furniture Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 394,500 in Hankook Furniture Co on December 6, 2024 and sell it today you would earn a total of 25,500 from holding Hankook Furniture Co or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jb Financial vs. Hankook Furniture Co
Performance |
| Timeline |
| Jb Financial |
| Hankook Furniture |
Jb Financial and Hankook Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jb Financial and Hankook Furniture
The main advantage of trading using opposite Jb Financial and Hankook Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jb Financial position performs unexpectedly, Hankook Furniture 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 Hankook Furniture will offset losses from the drop in Hankook Furniture's long position.| Jb Financial vs. Polaris Office Corp | Jb Financial vs. Dong A Steel Technology | Jb Financial vs. Mobileleader CoLtd | Jb Financial vs. Samhyun Steel Co |
| Hankook Furniture vs. Grand Korea Leisure | Hankook Furniture vs. Jahwa Electronics Co | Hankook Furniture vs. Iljin Display | Hankook Furniture vs. CKH Food Health |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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