Correlation Between Jeju Beer and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Golden Bridge 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 Jeju Beer and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Beer Co and Golden Bridge Investment, you can compare the effects of market volatilities on Jeju Beer and Golden Bridge 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 Jeju Beer with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Golden Bridge.
Diversification Opportunities for Jeju Beer and Golden Bridge
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jeju and Golden is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Golden Bridge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Bridge Investment and Jeju Beer 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 Jeju Beer Co are associated (or correlated) with Golden Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Bridge Investment has no effect on the direction of Jeju Beer i.e., Jeju Beer and Golden Bridge go up and down completely randomly.
Pair Corralation between Jeju Beer and Golden Bridge
Assuming the 90 days trading horizon Jeju Beer Co is expected to generate 2.39 times more return on investment than Golden Bridge. However, Jeju Beer is 2.39 times more volatile than Golden Bridge Investment. It trades about -0.03 of its potential returns per unit of risk. Golden Bridge Investment is currently generating about -0.08 per unit of risk. If you would invest 800,000 in Jeju Beer Co on September 2, 2024 and sell it today you would lose (475,000) from holding Jeju Beer Co or give up 59.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Beer Co vs. Golden Bridge Investment
Performance |
| Timeline |
| Jeju Beer |
| Golden Bridge Investment |
Jeju Beer and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Golden Bridge
The main advantage of trading using opposite Jeju Beer and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Golden Bridge 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 Golden Bridge will offset losses from the drop in Golden Bridge's long position.| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
| Golden Bridge vs. AptaBio Therapeutics | Golden Bridge vs. Daewoo SBI SPAC | Golden Bridge vs. Dream Security co | Golden Bridge vs. Microfriend |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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