Correlation Between Jin Air and Korea Real
Can any of the company-specific risk be diversified away by investing in both Jin Air and Korea Real 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 Korea Real 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 Korea Real Estate, you can compare the effects of market volatilities on Jin Air and Korea Real 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 Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and Korea Real.
Diversification Opportunities for Jin Air and Korea Real
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jin and Korea is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate 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 Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Jin Air i.e., Jin Air and Korea Real go up and down completely randomly.
Pair Corralation between Jin Air and Korea Real
Assuming the 90 days trading horizon Jin Air Co is expected to generate 5.53 times more return on investment than Korea Real. However, Jin Air is 5.53 times more volatile than Korea Real Estate. It trades about 0.01 of its potential returns per unit of risk. Korea Real Estate is currently generating about -0.16 per unit of risk. If you would invest 1,001,000 in Jin Air Co on November 7, 2024 and sell it today you would earn a total of 1,000.00 from holding Jin Air Co or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Jin Air Co vs. Korea Real Estate
Performance |
| Timeline |
| Jin Air |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Korea Real Estate |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Jin Air and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and Korea Real
The main advantage of trading using opposite Jin Air and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, Korea Real 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 Korea Real will offset losses from the drop in Korea Real's long position.| Jin Air vs. Mobileleader CoLtd | Jin Air vs. SK Chemicals Co | Jin Air vs. Hyundai Home Shopping | Jin Air vs. Hansol Chemical Co |
| Korea Real vs. Korea Plasma Technology | Korea Real vs. Eagle Veterinary Technology | Korea Real vs. KG Eco Technology | Korea Real vs. Samick Musical Instruments |
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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