Correlation Between Jin Air and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both Jin Air and Daesung Hi 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 Daesung Hi 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 Daesung Hi Tech Co, you can compare the effects of market volatilities on Jin Air and Daesung Hi 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 Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and Daesung Hi.
Diversification Opportunities for Jin Air and Daesung Hi
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jin and Daesung is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi Tech 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 Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of Jin Air i.e., Jin Air and Daesung Hi go up and down completely randomly.
Pair Corralation between Jin Air and Daesung Hi
Assuming the 90 days trading horizon Jin Air Co is expected to generate 0.6 times more return on investment than Daesung Hi. However, Jin Air Co is 1.66 times less risky than Daesung Hi. It trades about -0.03 of its potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.04 per unit of risk. If you would invest 1,695,000 in Jin Air Co on September 3, 2024 and sell it today you would lose (517,000) from holding Jin Air Co or give up 30.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jin Air Co vs. Daesung Hi Tech Co
Performance |
| Timeline |
| Jin Air |
| Daesung Hi Tech |
Jin Air and Daesung Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and Daesung Hi
The main advantage of trading using opposite Jin Air and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, Daesung Hi 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 Daesung Hi will offset losses from the drop in Daesung Hi's long position.| Jin Air vs. DataSolution | Jin Air vs. Alton Sports CoLtd | Jin Air vs. SCI Information Service | Jin Air vs. Shinsegae Food |
| Daesung Hi vs. Bohae Brewery | Daesung Hi vs. Clean Science co | Daesung Hi vs. Korea Investment Holdings | Daesung Hi vs. Nh Investment And |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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