Correlation Between Settlebank and JC Chemical
Can any of the company-specific risk be diversified away by investing in both Settlebank and JC Chemical 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 Settlebank and JC Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Settlebank and JC Chemical Co, you can compare the effects of market volatilities on Settlebank and JC Chemical 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 Settlebank with a short position of JC Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Settlebank and JC Chemical.
Diversification Opportunities for Settlebank and JC Chemical
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Settlebank and 137950 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Settlebank and JC Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Chemical and Settlebank 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 Settlebank are associated (or correlated) with JC Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Chemical has no effect on the direction of Settlebank i.e., Settlebank and JC Chemical go up and down completely randomly.
Pair Corralation between Settlebank and JC Chemical
Assuming the 90 days trading horizon Settlebank is expected to generate 1.59 times more return on investment than JC Chemical. However, Settlebank is 1.59 times more volatile than JC Chemical Co. It trades about -0.1 of its potential returns per unit of risk. JC Chemical Co is currently generating about -0.46 per unit of risk. If you would invest 1,443,000 in Settlebank on November 7, 2024 and sell it today you would lose (70,000) from holding Settlebank or give up 4.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Settlebank vs. JC Chemical Co
Performance |
| Timeline |
| Settlebank |
| JC Chemical |
Settlebank and JC Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Settlebank and JC Chemical
The main advantage of trading using opposite Settlebank and JC Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Settlebank position performs unexpectedly, JC Chemical 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 JC Chemical will offset losses from the drop in JC Chemical's long position.| Settlebank vs. Dongbang Transport Logistics | Settlebank vs. SKONEC Entertainment Co | Settlebank vs. Korea Petro Chemical | Settlebank vs. SH Energy Chemical |
| JC Chemical vs. Samsung Electronics Co | JC Chemical vs. SK Hynix | JC Chemical vs. LG Display | JC Chemical vs. KT Corporation |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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