Correlation Between Jeju Beer and ED Co
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and ED Co 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 ED Co 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 ED Co, you can compare the effects of market volatilities on Jeju Beer and ED Co 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 ED Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and ED Co.
Diversification Opportunities for Jeju Beer and ED Co
Very good diversification
The 3 months correlation between Jeju and 101360 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and ED Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ED Co 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 ED Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ED Co has no effect on the direction of Jeju Beer i.e., Jeju Beer and ED Co go up and down completely randomly.
Pair Corralation between Jeju Beer and ED Co
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the ED Co. But the stock apears to be less risky and, when comparing its historical volatility, Jeju Beer Co is 1.32 times less risky than ED Co. The stock trades about -0.02 of its potential returns per unit of risk. The ED Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,824,264 in ED Co on September 14, 2024 and sell it today you would earn a total of 655,736 from holding ED Co or generate 35.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Jeju Beer Co vs. ED Co
Performance |
| Timeline |
| Jeju Beer |
| ED Co |
Jeju Beer and ED Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and ED Co
The main advantage of trading using opposite Jeju Beer and ED Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, ED Co 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 ED Co will offset losses from the drop in ED Co's long position.| Jeju Beer vs. KCC Engineering Construction | Jeju Beer vs. Keyang Electric Machinery | Jeju Beer vs. Camus Engineering Construction | Jeju Beer vs. Daishin Information Communications |
| ED Co vs. BNK Financial Group | ED Co vs. Jb Financial | ED Co vs. Koryo Credit Information | ED Co vs. Barunson Entertainment Arts |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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