Correlation Between Jin Air and Automobile
Can any of the company-specific risk be diversified away by investing in both Jin Air and Automobile 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 Automobile 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 Automobile Pc, you can compare the effects of market volatilities on Jin Air and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and Automobile.
Diversification Opportunities for Jin Air and Automobile
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jin and Automobile is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Jin Air i.e., Jin Air and Automobile go up and down completely randomly.
Pair Corralation between Jin Air and Automobile
Assuming the 90 days trading horizon Jin Air Co is expected to generate 0.68 times more return on investment than Automobile. However, Jin Air Co is 1.47 times less risky than Automobile. It trades about -0.02 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.04 per unit of risk. If you would invest 1,570,000 in Jin Air Co on September 3, 2024 and sell it today you would lose (392,000) from holding Jin Air Co or give up 24.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jin Air Co vs. Automobile Pc
Performance |
| Timeline |
| Jin Air |
| Automobile Pc |
Jin Air and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and Automobile
The main advantage of trading using opposite Jin Air and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Jin Air vs. DataSolution | Jin Air vs. Alton Sports CoLtd | Jin Air vs. SCI Information Service | Jin Air vs. Shinsegae Food |
| Automobile vs. Korea Real Estate | Automobile vs. Busan Industrial Co | Automobile vs. UNISEM Co | Automobile vs. RPBio Inc |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |