Correlation Between Jeju Beer and Youl Chon
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Youl Chon 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 Youl Chon 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 Youl Chon Chemical, you can compare the effects of market volatilities on Jeju Beer and Youl Chon 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 Youl Chon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Youl Chon.
Diversification Opportunities for Jeju Beer and Youl Chon
Very good diversification
The 3 months correlation between Jeju and Youl is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Youl Chon Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youl Chon Chemical 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 Youl Chon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youl Chon Chemical has no effect on the direction of Jeju Beer i.e., Jeju Beer and Youl Chon go up and down completely randomly.
Pair Corralation between Jeju Beer and Youl Chon
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the Youl Chon. In addition to that, Jeju Beer is 1.23 times more volatile than Youl Chon Chemical. It trades about -0.03 of its total potential returns per unit of risk. Youl Chon Chemical is currently generating about -0.01 per unit of volatility. If you would invest 3,607,462 in Youl Chon Chemical on August 31, 2024 and sell it today you would lose (1,242,462) from holding Youl Chon Chemical or give up 34.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Beer Co vs. Youl Chon Chemical
Performance |
| Timeline |
| Jeju Beer |
| Youl Chon Chemical |
Jeju Beer and Youl Chon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Youl Chon
The main advantage of trading using opposite Jeju Beer and Youl Chon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Youl Chon 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 Youl Chon will offset losses from the drop in Youl Chon's long position.| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
| Youl Chon vs. AptaBio Therapeutics | Youl Chon vs. Daewoo SBI SPAC | Youl Chon vs. Dream Security co | Youl Chon 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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