Correlation Between TOPMATERIAL and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both TOPMATERIAL and Jeong Moon 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 TOPMATERIAL and Jeong Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOPMATERIAL LTD and Jeong Moon Information, you can compare the effects of market volatilities on TOPMATERIAL and Jeong Moon 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 TOPMATERIAL with a short position of Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOPMATERIAL and Jeong Moon.
Diversification Opportunities for TOPMATERIAL and Jeong Moon
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TOPMATERIAL and Jeong is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding TOPMATERIAL LTD and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information and TOPMATERIAL 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 TOPMATERIAL LTD are associated (or correlated) with Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of TOPMATERIAL i.e., TOPMATERIAL and Jeong Moon go up and down completely randomly.
Pair Corralation between TOPMATERIAL and Jeong Moon
Assuming the 90 days trading horizon TOPMATERIAL LTD is expected to generate 8.63 times more return on investment than Jeong Moon. However, TOPMATERIAL is 8.63 times more volatile than Jeong Moon Information. It trades about 0.21 of its potential returns per unit of risk. Jeong Moon Information is currently generating about 0.15 per unit of risk. If you would invest 2,660,000 in TOPMATERIAL LTD on November 28, 2024 and sell it today you would earn a total of 820,000 from holding TOPMATERIAL LTD or generate 30.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOPMATERIAL LTD vs. Jeong Moon Information
Performance |
| Timeline |
| TOPMATERIAL LTD |
| Jeong Moon Information |
TOPMATERIAL and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOPMATERIAL and Jeong Moon
The main advantage of trading using opposite TOPMATERIAL and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOPMATERIAL position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.| TOPMATERIAL vs. Samsung Electronics Co | TOPMATERIAL vs. Samsung Electronics Co | TOPMATERIAL vs. LG Energy Solution | TOPMATERIAL vs. SK Hynix |
| Jeong Moon vs. Samwha Electronics Co | Jeong Moon vs. Koryo Credit Information | Jeong Moon vs. Shinil Electronics Co | Jeong Moon vs. DAEDUCK ELECTRONICS CoLtd |
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 CEOs Directory module to screen CEOs from public companies around the world.
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