Correlation Between Jeju Beer and Biodyne
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Biodyne 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 Biodyne 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 Biodyne Co, you can compare the effects of market volatilities on Jeju Beer and Biodyne 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 Biodyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Biodyne.
Diversification Opportunities for Jeju Beer and Biodyne
Very good diversification
The 3 months correlation between Jeju and Biodyne is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Biodyne Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodyne 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 Biodyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodyne has no effect on the direction of Jeju Beer i.e., Jeju Beer and Biodyne go up and down completely randomly.
Pair Corralation between Jeju Beer and Biodyne
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the Biodyne. In addition to that, Jeju Beer is 1.01 times more volatile than Biodyne Co. It trades about -0.03 of its total potential returns per unit of risk. Biodyne Co is currently generating about 0.04 per unit of volatility. If you would invest 1,226,000 in Biodyne Co on September 12, 2024 and sell it today you would earn a total of 390,000 from holding Biodyne Co or generate 31.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.69% |
| Values | Daily Returns |
Jeju Beer Co vs. Biodyne Co
Performance |
| Timeline |
| Jeju Beer |
| Biodyne |
Jeju Beer and Biodyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Biodyne
The main advantage of trading using opposite Jeju Beer and Biodyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Biodyne 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 Biodyne will offset losses from the drop in Biodyne's long position.| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
| Biodyne vs. Jeju Beer Co | Biodyne vs. Kukdong Oil Chemicals | Biodyne vs. PLAYWITH | Biodyne vs. Shinsegae Food |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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