Correlation Between Jin Air and Dongbang Ship
Can any of the company-specific risk be diversified away by investing in both Jin Air and Dongbang Ship 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 Dongbang Ship 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 Dongbang Ship Machinery, you can compare the effects of market volatilities on Jin Air and Dongbang Ship 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 Dongbang Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and Dongbang Ship.
Diversification Opportunities for Jin Air and Dongbang Ship
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jin and Dongbang is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and Dongbang Ship Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongbang Ship Machinery 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 Dongbang Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongbang Ship Machinery has no effect on the direction of Jin Air i.e., Jin Air and Dongbang Ship go up and down completely randomly.
Pair Corralation between Jin Air and Dongbang Ship
Assuming the 90 days trading horizon Jin Air Co is expected to generate 1.12 times more return on investment than Dongbang Ship. However, Jin Air is 1.12 times more volatile than Dongbang Ship Machinery. It trades about 0.03 of its potential returns per unit of risk. Dongbang Ship Machinery is currently generating about -0.02 per unit of risk. If you would invest 1,162,000 in Jin Air Co on September 3, 2024 and sell it today you would earn a total of 16,000 from holding Jin Air Co or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jin Air Co vs. Dongbang Ship Machinery
Performance |
| Timeline |
| Jin Air |
| Dongbang Ship Machinery |
Jin Air and Dongbang Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and Dongbang Ship
The main advantage of trading using opposite Jin Air and Dongbang Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, Dongbang Ship 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 Dongbang Ship will offset losses from the drop in Dongbang Ship's long position.| Jin Air vs. DataSolution | Jin Air vs. Alton Sports CoLtd | Jin Air vs. SCI Information Service | Jin Air vs. Shinsegae Food |
| Dongbang Ship vs. LG Display | Dongbang Ship vs. Hyundai Motor | Dongbang Ship vs. Hyundai Motor Co | Dongbang Ship vs. Hyundai Motor Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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