Correlation Between Jeju Beer and Seohee Construction
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Seohee 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 Seohee 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 Seohee Construction Co, you can compare the effects of market volatilities on Jeju Beer and Seohee 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 Seohee Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Seohee Construction.
Diversification Opportunities for Jeju Beer and Seohee Construction
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jeju and Seohee is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Seohee Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seohee 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 Seohee Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seohee Construction has no effect on the direction of Jeju Beer i.e., Jeju Beer and Seohee Construction go up and down completely randomly.
Pair Corralation between Jeju Beer and Seohee Construction
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the Seohee Construction. In addition to that, Jeju Beer is 3.1 times more volatile than Seohee Construction Co. It trades about -0.06 of its total potential returns per unit of risk. Seohee Construction Co is currently generating about 0.07 per unit of volatility. If you would invest 136,500 in Seohee Construction Co on September 5, 2024 and sell it today you would earn a total of 18,100 from holding Seohee Construction Co or generate 13.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Beer Co vs. Seohee Construction Co
Performance |
| Timeline |
| Jeju Beer |
| Seohee Construction |
Jeju Beer and Seohee Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Seohee Construction
The main advantage of trading using opposite Jeju Beer and Seohee Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Seohee 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 Seohee Construction will offset losses from the drop in Seohee 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 |
| Seohee Construction vs. KCC Engineering Construction | Seohee Construction vs. Samchuly Bicycle Co | Seohee Construction vs. SFA Engineering | Seohee Construction vs. SEOHAN Const EngcoLtd |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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