Correlation Between Jin Air and STI
Can any of the company-specific risk be diversified away by investing in both Jin Air and STI 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 STI 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 STI Co, you can compare the effects of market volatilities on Jin Air and STI 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 STI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and STI.
Diversification Opportunities for Jin Air and STI
Very good diversification
The 3 months correlation between Jin and STI is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and STI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Co 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 STI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Co has no effect on the direction of Jin Air i.e., Jin Air and STI go up and down completely randomly.
Pair Corralation between Jin Air and STI
Assuming the 90 days trading horizon Jin Air Co is expected to under-perform the STI. But the stock apears to be less risky and, when comparing its historical volatility, Jin Air Co is 1.92 times less risky than STI. The stock trades about -0.05 of its potential returns per unit of risk. The STI Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,809,956 in STI Co on September 12, 2024 and sell it today you would lose (1,362,956) from holding STI Co or give up 48.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jin Air Co vs. STI Co
Performance |
| Timeline |
| Jin Air |
| STI Co |
Jin Air and STI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and STI
The main advantage of trading using opposite Jin Air and STI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, STI 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 STI will offset losses from the drop in STI'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 |
| STI vs. Moonbae Steel | STI vs. Dongwoo Farm To | STI vs. Hanil Iron Steel | STI vs. KCC Engineering Construction |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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