Correlation Between Jeju Beer and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Haitai Confectionery 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 Haitai Confectionery 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 Haitai Confectionery Foods, you can compare the effects of market volatilities on Jeju Beer and Haitai Confectionery 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 Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Haitai Confectionery.
Diversification Opportunities for Jeju Beer and Haitai Confectionery
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jeju and Haitai is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery 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 Haitai Confectionery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haitai Confectionery has no effect on the direction of Jeju Beer i.e., Jeju Beer and Haitai Confectionery go up and down completely randomly.
Pair Corralation between Jeju Beer and Haitai Confectionery
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the Haitai Confectionery. In addition to that, Jeju Beer is 1.81 times more volatile than Haitai Confectionery Foods. It trades about -0.02 of its total potential returns per unit of risk. Haitai Confectionery Foods is currently generating about 0.01 per unit of volatility. If you would invest 623,715 in Haitai Confectionery Foods on September 13, 2024 and sell it today you would lose (26,715) from holding Haitai Confectionery Foods or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Beer Co vs. Haitai Confectionery Foods
Performance |
| Timeline |
| Jeju Beer |
| Haitai Confectionery |
Jeju Beer and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Haitai Confectionery
The main advantage of trading using opposite Jeju Beer and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Haitai Confectionery 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 Haitai Confectionery will offset losses from the drop in Haitai Confectionery's long position.| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
| Haitai Confectionery vs. Samsung Electronics Co | Haitai Confectionery vs. Samsung Electronics Co | Haitai Confectionery vs. SK Hynix | Haitai Confectionery vs. POSCO Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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