Correlation Between Jeju Beer and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and Daishin Balance 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 Daishin Balance 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 Daishin Balance No8, you can compare the effects of market volatilities on Jeju Beer and Daishin Balance 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 Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and Daishin Balance.
Diversification Opportunities for Jeju Beer and Daishin Balance
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jeju and Daishin is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Daishin Balance No8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance No8 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 Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance No8 has no effect on the direction of Jeju Beer i.e., Jeju Beer and Daishin Balance go up and down completely randomly.
Pair Corralation between Jeju Beer and Daishin Balance
Assuming the 90 days trading horizon Jeju Beer Co is expected to generate 1.21 times more return on investment than Daishin Balance. However, Jeju Beer is 1.21 times more volatile than Daishin Balance No8. It trades about 0.11 of its potential returns per unit of risk. Daishin Balance No8 is currently generating about -0.39 per unit of risk. If you would invest 290,000 in Jeju Beer Co on September 5, 2024 and sell it today you would earn a total of 22,000 from holding Jeju Beer Co or generate 7.59% 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. Daishin Balance No8
Performance |
| Timeline |
| Jeju Beer |
| Daishin Balance No8 |
Jeju Beer and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and Daishin Balance
The main advantage of trading using opposite Jeju Beer and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance's long position.| Jeju Beer vs. AptaBio Therapeutics | Jeju Beer vs. Daewoo SBI SPAC | Jeju Beer vs. Dream Security co | Jeju Beer vs. Microfriend |
| Daishin Balance vs. Youl Chon Chemical | Daishin Balance vs. Sempio Foods Co | Daishin Balance vs. Hanjin Transportation Co | Daishin Balance vs. Dongbang Transport Logistics |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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