Correlation Between CU Tech and Jinro Distillers
Can any of the company-specific risk be diversified away by investing in both CU Tech and Jinro Distillers 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 CU Tech and Jinro Distillers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CU Tech Corp and Jinro Distillers Co, you can compare the effects of market volatilities on CU Tech and Jinro Distillers 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 CU Tech with a short position of Jinro Distillers. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Tech and Jinro Distillers.
Diversification Opportunities for CU Tech and Jinro Distillers
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 376290 and Jinro is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CU Tech Corp and Jinro Distillers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinro Distillers and CU Tech 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 CU Tech Corp are associated (or correlated) with Jinro Distillers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinro Distillers has no effect on the direction of CU Tech i.e., CU Tech and Jinro Distillers go up and down completely randomly.
Pair Corralation between CU Tech and Jinro Distillers
Assuming the 90 days trading horizon CU Tech is expected to generate 1.79 times less return on investment than Jinro Distillers. In addition to that, CU Tech is 2.2 times more volatile than Jinro Distillers Co. It trades about 0.09 of its total potential returns per unit of risk. Jinro Distillers Co is currently generating about 0.34 per unit of volatility. If you would invest 1,665,559 in Jinro Distillers Co on October 23, 2024 and sell it today you would earn a total of 51,441 from holding Jinro Distillers Co or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
CU Tech Corp vs. Jinro Distillers Co
Performance |
| Timeline |
| CU Tech Corp |
| Jinro Distillers |
CU Tech and Jinro Distillers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Tech and Jinro Distillers
The main advantage of trading using opposite CU Tech and Jinro Distillers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Tech position performs unexpectedly, Jinro Distillers 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 Jinro Distillers will offset losses from the drop in Jinro Distillers' long position.| CU Tech vs. Samyang Foods Co | CU Tech vs. Korea Information Communications | CU Tech vs. Innowireless Co | CU Tech vs. Ssangyong Information Communication |
| Jinro Distillers vs. CU Tech Corp | Jinro Distillers vs. Hanjoo Light Metal | Jinro Distillers vs. LG Household Healthcare | Jinro Distillers vs. Lion Chemtech Co |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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