Correlation Between Jeju Beer and Samhyun Steel
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Samhyun Steel 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 Samhyun Steel 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 Samhyun Steel Co, you can compare the effects of market volatilities on Jeju Beer and Samhyun Steel 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 Samhyun Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Samhyun Steel.
Diversification Opportunities for Jeju Beer and Samhyun Steel
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jeju and Samhyun is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Samhyun Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun Steel 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 Samhyun Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhyun Steel has no effect on the direction of Jeju Beer i.e., Jeju Beer and Samhyun Steel go up and down completely randomly.
Pair Corralation between Jeju Beer and Samhyun Steel
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the Samhyun Steel. In addition to that, Jeju Beer is 3.45 times more volatile than Samhyun Steel Co. It trades about -0.04 of its total potential returns per unit of risk. Samhyun Steel Co is currently generating about 0.0 per unit of volatility. If you would invest 430,918 in Samhyun Steel Co on November 1, 2024 and sell it today you would lose (1,918) from holding Samhyun Steel Co or give up 0.45% 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. Samhyun Steel Co
Performance |
| Timeline |
| Jeju Beer |
| Samhyun Steel |
Jeju Beer and Samhyun Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Samhyun Steel
The main advantage of trading using opposite Jeju Beer and Samhyun Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Samhyun Steel 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 Samhyun Steel will offset losses from the drop in Samhyun Steel's long position.| Jeju Beer vs. Korea Investment Holdings | Jeju Beer vs. EBEST Investment Securities | Jeju Beer vs. Leaders Technology Investment | Jeju Beer vs. Korea Petro Chemical |
| Samhyun Steel vs. Kolon Plastics | Samhyun Steel vs. Sempio Foods Co | Samhyun Steel vs. DONGKUK TED METAL | Samhyun Steel vs. Hyosung Advanced Materials |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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