Correlation Between Jeju Beer and Hanshin Construction
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Hanshin Construction 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 Hanshin Construction 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 Hanshin Construction Co, you can compare the effects of market volatilities on Jeju Beer and Hanshin Construction 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 Hanshin Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Hanshin Construction.
Diversification Opportunities for Jeju Beer and Hanshin Construction
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jeju and Hanshin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Hanshin Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanshin Construction 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 Hanshin Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanshin Construction has no effect on the direction of Jeju Beer i.e., Jeju Beer and Hanshin Construction go up and down completely randomly.
Pair Corralation between Jeju Beer and Hanshin Construction
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the Hanshin Construction. In addition to that, Jeju Beer is 2.23 times more volatile than Hanshin Construction Co. It trades about -0.02 of its total potential returns per unit of risk. Hanshin Construction Co is currently generating about -0.02 per unit of volatility. If you would invest 896,521 in Hanshin Construction Co on September 5, 2024 and sell it today you would lose (208,521) from holding Hanshin Construction Co or give up 23.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Beer Co vs. Hanshin Construction Co
Performance |
| Timeline |
| Jeju Beer |
| Hanshin Construction |
Jeju Beer and Hanshin Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Hanshin Construction
The main advantage of trading using opposite Jeju Beer and Hanshin Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Hanshin Construction 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 Hanshin Construction will offset losses from the drop in Hanshin Construction's long position.| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
| Hanshin Construction vs. DB Insurance Co | Hanshin Construction vs. Aprogen Healthcare Games | Hanshin Construction vs. NewFlex Technology Co | Hanshin Construction vs. Global Standard Technology |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |