Correlation Between Jb Financial and Korea Aerospace
Can any of the company-specific risk be diversified away by investing in both Jb Financial and Korea Aerospace 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 Korea Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jb Financial and Korea Aerospace Industries, you can compare the effects of market volatilities on Jb Financial and Korea Aerospace 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 Korea Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jb Financial and Korea Aerospace.
Diversification Opportunities for Jb Financial and Korea Aerospace
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 175330 and Korea is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Korea Aerospace Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Aerospace Indu 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 Korea Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Aerospace Indu has no effect on the direction of Jb Financial i.e., Jb Financial and Korea Aerospace go up and down completely randomly.
Pair Corralation between Jb Financial and Korea Aerospace
Assuming the 90 days trading horizon Jb Financial is expected to generate 0.89 times more return on investment than Korea Aerospace. However, Jb Financial is 1.13 times less risky than Korea Aerospace. It trades about 0.11 of its potential returns per unit of risk. Korea Aerospace Industries is currently generating about 0.03 per unit of risk. If you would invest 1,344,876 in Jb Financial on September 14, 2024 and sell it today you would earn a total of 452,124 from holding Jb Financial or generate 33.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jb Financial vs. Korea Aerospace Industries
Performance |
| Timeline |
| Jb Financial |
| Korea Aerospace Indu |
Jb Financial and Korea Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jb Financial and Korea Aerospace
The main advantage of trading using opposite Jb Financial and Korea Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jb Financial position performs unexpectedly, Korea Aerospace 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 Korea Aerospace will offset losses from the drop in Korea Aerospace's long position.| Jb Financial vs. KB Financial Group | Jb Financial vs. Shinhan Financial Group | Jb Financial vs. Hana Financial | Jb Financial vs. Woori Financial Group |
| Korea Aerospace vs. Sam Yang Foods | Korea Aerospace vs. Jb Financial | Korea Aerospace vs. Korean Reinsurance Co | Korea Aerospace vs. Haitai Confectionery Foods |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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