Correlation Between Hyosung Advanced and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and Jeju Bank 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 Hyosung Advanced and Jeju Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Advanced Materials and Jeju Bank, you can compare the effects of market volatilities on Hyosung Advanced and Jeju Bank 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 Hyosung Advanced with a short position of Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and Jeju Bank.
Diversification Opportunities for Hyosung Advanced and Jeju Bank
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyosung and Jeju is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank and Hyosung Advanced 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 Hyosung Advanced Materials are associated (or correlated) with Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and Jeju Bank go up and down completely randomly.
Pair Corralation between Hyosung Advanced and Jeju Bank
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to under-perform the Jeju Bank. In addition to that, Hyosung Advanced is 2.63 times more volatile than Jeju Bank. It trades about -0.57 of its total potential returns per unit of risk. Jeju Bank is currently generating about -0.16 per unit of volatility. If you would invest 833,000 in Jeju Bank on September 1, 2024 and sell it today you would lose (40,000) from holding Jeju Bank or give up 4.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyosung Advanced Materials vs. Jeju Bank
Performance |
| Timeline |
| Hyosung Advanced Mat |
| Jeju Bank |
Hyosung Advanced and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Advanced and Jeju Bank
The main advantage of trading using opposite Hyosung Advanced and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, Jeju Bank 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 Jeju Bank will offset losses from the drop in Jeju Bank's long position.| Hyosung Advanced vs. Busan Industrial Co | Hyosung Advanced vs. Busan Ind | Hyosung Advanced vs. Mirae Asset Daewoo | Hyosung Advanced vs. Finebesteel |
| Jeju Bank vs. AptaBio Therapeutics | Jeju Bank vs. Daewoo SBI SPAC | Jeju Bank vs. Dream Security co | Jeju Bank vs. Microfriend |
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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