Correlation Between Jin Air and Songwon Industrial
Can any of the company-specific risk be diversified away by investing in both Jin Air and Songwon Industrial 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 Jin Air and Songwon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jin Air Co and Songwon Industrial Co, you can compare the effects of market volatilities on Jin Air and Songwon Industrial 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 Jin Air with a short position of Songwon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and Songwon Industrial.
Diversification Opportunities for Jin Air and Songwon Industrial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jin and Songwon is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and Songwon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Songwon Industrial and Jin Air 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 Jin Air Co are associated (or correlated) with Songwon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Songwon Industrial has no effect on the direction of Jin Air i.e., Jin Air and Songwon Industrial go up and down completely randomly.
Pair Corralation between Jin Air and Songwon Industrial
Assuming the 90 days trading horizon Jin Air Co is expected to generate 0.7 times more return on investment than Songwon Industrial. However, Jin Air Co is 1.42 times less risky than Songwon Industrial. It trades about 0.04 of its potential returns per unit of risk. Songwon Industrial Co is currently generating about 0.0 per unit of risk. If you would invest 982,000 in Jin Air Co on December 11, 2024 and sell it today you would earn a total of 20,000 from holding Jin Air Co or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jin Air Co vs. Songwon Industrial Co
Performance |
| Timeline |
| Jin Air |
| Songwon Industrial |
Jin Air and Songwon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and Songwon Industrial
The main advantage of trading using opposite Jin Air and Songwon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, Songwon Industrial 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 Songwon Industrial will offset losses from the drop in Songwon Industrial's long position.| Jin Air vs. Hanwha InvestmentSecurities Co | Jin Air vs. Asiana Airlines | Jin Air vs. EBEST Investment Securities | Jin Air vs. Sangsangin Investment Securities |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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