Correlation Between Jin Air and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both Jin Air and Jeong Moon 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 Jeong Moon 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 Jeong Moon Information, you can compare the effects of market volatilities on Jin Air and Jeong Moon 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 Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and Jeong Moon.
Diversification Opportunities for Jin Air and Jeong Moon
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jin and Jeong is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon 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 Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of Jin Air i.e., Jin Air and Jeong Moon go up and down completely randomly.
Pair Corralation between Jin Air and Jeong Moon
Assuming the 90 days trading horizon Jin Air Co is expected to under-perform the Jeong Moon. In addition to that, Jin Air is 1.1 times more volatile than Jeong Moon Information. It trades about -0.04 of its total potential returns per unit of risk. Jeong Moon Information is currently generating about -0.03 per unit of volatility. If you would invest 118,600 in Jeong Moon Information on October 28, 2024 and sell it today you would lose (35,700) from holding Jeong Moon Information or give up 30.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jin Air Co vs. Jeong Moon Information
Performance |
| Timeline |
| Jin Air |
| Jeong Moon Information |
Jin Air and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and Jeong Moon
The main advantage of trading using opposite Jin Air and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.| Jin Air vs. Vissem Electronics Co | Jin Air vs. Sungmoon Electronics Co | Jin Air vs. Daewoo Electronic Components | Jin Air vs. DRB Industrial Co |
| Jeong Moon vs. Kolon Plastics | Jeong Moon vs. Daejoo Electronic Materials | Jeong Moon vs. Hana Materials | Jeong Moon vs. LS Materials |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |