Correlation Between Jeju Beer and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Ssangyong Information 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 Ssangyong Information 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 Ssangyong Information Communication, you can compare the effects of market volatilities on Jeju Beer and Ssangyong Information 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 Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Ssangyong Information.
Diversification Opportunities for Jeju Beer and Ssangyong Information
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jeju and Ssangyong is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information 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 Ssangyong Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Information has no effect on the direction of Jeju Beer i.e., Jeju Beer and Ssangyong Information go up and down completely randomly.
Pair Corralation between Jeju Beer and Ssangyong Information
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the Ssangyong Information. In addition to that, Jeju Beer is 2.42 times more volatile than Ssangyong Information Communication. It trades about -0.32 of its total potential returns per unit of risk. Ssangyong Information Communication is currently generating about -0.13 per unit of volatility. If you would invest 64,500 in Ssangyong Information Communication on November 6, 2024 and sell it today you would lose (1,300) from holding Ssangyong Information Communication or give up 2.02% 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. Ssangyong Information Communic
Performance |
| Timeline |
| Jeju Beer |
| Ssangyong Information |
Jeju Beer and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Ssangyong Information
The main advantage of trading using opposite Jeju Beer and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Ssangyong Information 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 Ssangyong Information will offset losses from the drop in Ssangyong Information's long position.| Jeju Beer vs. Global Standard Technology | Jeju Beer vs. KG Eco Technology | Jeju Beer vs. Guyoung Technology Co | Jeju Beer vs. Nature and Environment |
| Ssangyong Information vs. Korean Air Lines | Ssangyong Information vs. Jahwa Electronics Co | Ssangyong Information vs. PJ Electronics Co | Ssangyong Information vs. Daewoo Electronic Components |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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