Correlation Between Jin Air and GS Retail
Can any of the company-specific risk be diversified away by investing in both Jin Air and GS Retail 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 GS Retail 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 GS Retail Co, you can compare the effects of market volatilities on Jin Air and GS Retail 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 GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and GS Retail.
Diversification Opportunities for Jin Air and GS Retail
Excellent diversification
The 3 months correlation between Jin and 007070 is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail 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 GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Jin Air i.e., Jin Air and GS Retail go up and down completely randomly.
Pair Corralation between Jin Air and GS Retail
Assuming the 90 days trading horizon Jin Air is expected to generate 8.74 times less return on investment than GS Retail. In addition to that, Jin Air is 2.14 times more volatile than GS Retail Co. It trades about 0.03 of its total potential returns per unit of risk. GS Retail Co is currently generating about 0.55 per unit of volatility. If you would invest 2,040,000 in GS Retail Co on September 13, 2024 and sell it today you would earn a total of 275,000 from holding GS Retail Co or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 59.09% |
| Values | Daily Returns |
Jin Air Co vs. GS Retail Co
Performance |
| Timeline |
| Jin Air |
| GS Retail |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Jin Air and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and GS Retail
The main advantage of trading using opposite Jin Air and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| Jin Air vs. Air Busan Co | Jin Air vs. Tway Air Co | Jin Air vs. Solution Advanced Technology | Jin Air vs. Busan Industrial Co |
| GS Retail vs. Samsung Electronics Co | GS Retail vs. Samsung Electronics Co | GS Retail vs. SK Hynix | GS Retail vs. POSCO Holdings |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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