Correlation Between Jeju Beer and Jeju Air
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Jeju Air 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 Jeju Air 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 Jeju Air Co, you can compare the effects of market volatilities on Jeju Beer and Jeju Air 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 Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Jeju Air.
Diversification Opportunities for Jeju Beer and Jeju Air
Weak diversification
The 3 months correlation between Jeju and Jeju is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air 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 Jeju Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Air has no effect on the direction of Jeju Beer i.e., Jeju Beer and Jeju Air go up and down completely randomly.
Pair Corralation between Jeju Beer and Jeju Air
Assuming the 90 days trading horizon Jeju Beer Co is expected to generate 1.58 times more return on investment than Jeju Air. However, Jeju Beer is 1.58 times more volatile than Jeju Air Co. It trades about 0.15 of its potential returns per unit of risk. Jeju Air Co is currently generating about 0.07 per unit of risk. If you would invest 292,000 in Jeju Beer Co on September 1, 2024 and sell it today you would earn a total of 33,000 from holding Jeju Beer Co or generate 11.3% 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. Jeju Air Co
Performance |
| Timeline |
| Jeju Beer |
| Jeju Air |
Jeju Beer and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Jeju Air
The main advantage of trading using opposite Jeju Beer and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Jeju Air 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 Jeju Air will offset losses from the drop in Jeju Air's long position.| Jeju Beer vs. Automobile Pc | Jeju Beer vs. Ssangyong Information Communication | Jeju Beer vs. Nice Information Telecommunication | Jeju Beer vs. Solution Advanced Technology |
| Jeju Air vs. Korea New Network | Jeju Air vs. ICD Co | Jeju Air vs. DYPNF CoLtd | Jeju Air vs. Busan Industrial 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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