Correlation Between Jeju Beer and DAEDUCK ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Jeju Beer and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd, you can compare the effects of market volatilities on Jeju Beer and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and DAEDUCK ELECTRONICS.
Diversification Opportunities for Jeju Beer and DAEDUCK ELECTRONICS
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jeju and DAEDUCK is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and DAEDUCK ELECTRONICS CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEDUCK ELECTRONICS CoLtd 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 DAEDUCK ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEDUCK ELECTRONICS CoLtd has no effect on the direction of Jeju Beer i.e., Jeju Beer and DAEDUCK ELECTRONICS go up and down completely randomly.
Pair Corralation between Jeju Beer and DAEDUCK ELECTRONICS
Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the DAEDUCK ELECTRONICS. In addition to that, Jeju Beer is 1.47 times more volatile than DAEDUCK ELECTRONICS CoLtd. It trades about -0.34 of its total potential returns per unit of risk. DAEDUCK ELECTRONICS CoLtd is currently generating about 0.05 per unit of volatility. If you would invest 810,000 in DAEDUCK ELECTRONICS CoLtd on November 4, 2024 and sell it today you would earn a total of 8,000 from holding DAEDUCK ELECTRONICS CoLtd or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Beer Co vs. DAEDUCK ELECTRONICS CoLtd
Performance |
| Timeline |
| Jeju Beer |
| DAEDUCK ELECTRONICS CoLtd |
Jeju Beer and DAEDUCK ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Beer and DAEDUCK ELECTRONICS
The main advantage of trading using opposite Jeju Beer and DAEDUCK ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Beer position performs unexpectedly, DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS will offset losses from the drop in DAEDUCK ELECTRONICS's long position.| Jeju Beer vs. Lotte Non Life Insurance | Jeju Beer vs. Samsung Life Insurance | Jeju Beer vs. ENF Technology Co | Jeju Beer vs. Pureun Mutual Savings |
| DAEDUCK ELECTRONICS vs. Nice Information Telecommunication | DAEDUCK ELECTRONICS vs. Jinro Distillers Co | DAEDUCK ELECTRONICS vs. Lotte Non Life Insurance | DAEDUCK ELECTRONICS vs. CG Hi Tech |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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