Correlation Between Jeju Beer and Semyung Electric
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Semyung Electric 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 Semyung Electric 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 Semyung Electric Machinery, you can compare the effects of market volatilities on Jeju Beer and Semyung Electric 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 Semyung Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Semyung Electric.
Diversification Opportunities for Jeju Beer and Semyung Electric
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jeju and Semyung is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Semyung Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semyung Electric Mac 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 Semyung Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semyung Electric Mac has no effect on the direction of Jeju Beer i.e., Jeju Beer and Semyung Electric go up and down completely randomly.
Pair Corralation between Jeju Beer and Semyung Electric
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the Semyung Electric. But the stock apears to be less risky and, when comparing its historical volatility, Jeju Beer Co is 1.05 times less risky than Semyung Electric. The stock trades about -0.06 of its potential returns per unit of risk. The Semyung Electric Machinery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 433,000 in Semyung Electric Machinery on September 5, 2024 and sell it today you would earn a total of 25,000 from holding Semyung Electric Machinery or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Beer Co vs. Semyung Electric Machinery
Performance |
| Timeline |
| Jeju Beer |
| Semyung Electric Mac |
Jeju Beer and Semyung Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Semyung Electric
The main advantage of trading using opposite Jeju Beer and Semyung Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Semyung Electric 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 Semyung Electric will offset losses from the drop in Semyung Electric's long position.| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
| Semyung Electric vs. PLAYWITH | Semyung Electric vs. Hyundai Engineering Plastics | Semyung Electric vs. Hana Materials | Semyung Electric vs. Lake Materials Co |
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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