Correlation Between Jin Air and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Jin Air and Daishin Information 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 Daishin Information 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 Daishin Information Communications, you can compare the effects of market volatilities on Jin Air and Daishin Information 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 Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and Daishin Information.
Diversification Opportunities for Jin Air and Daishin Information
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jin and Daishin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information 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 Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Jin Air i.e., Jin Air and Daishin Information go up and down completely randomly.
Pair Corralation between Jin Air and Daishin Information
Assuming the 90 days trading horizon Jin Air Co is expected to under-perform the Daishin Information. But the stock apears to be less risky and, when comparing its historical volatility, Jin Air Co is 1.34 times less risky than Daishin Information. The stock trades about -0.07 of its potential returns per unit of risk. The Daishin Information Communications is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 103,000 in Daishin Information Communications on December 1, 2024 and sell it today you would earn a total of 16,500 from holding Daishin Information Communications or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jin Air Co vs. Daishin Information Communicat
Performance |
| Timeline |
| Jin Air |
| Daishin Information |
Jin Air and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and Daishin Information
The main advantage of trading using opposite Jin Air and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, Daishin Information 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 Daishin Information will offset losses from the drop in Daishin Information's long position.| Jin Air vs. Industrial Bank | Jin Air vs. Samyung Trading Co | Jin Air vs. E Investment Development | Jin Air vs. Kbi Metal Co |
| Daishin Information vs. Korea Petro Chemical | Daishin Information vs. Hana Technology Co | Daishin Information vs. Daou Technology | Daishin Information vs. Korea Plasma Technology |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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