Correlation Between Jeju Bank and Clean Science

Can any of the company-specific risk be diversified away by investing in both Jeju Bank and Clean Science 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 Bank and Clean Science into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jeju Bank and Clean Science co, you can compare the effects of market volatilities on Jeju Bank and Clean Science 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 Bank with a short position of Clean Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Bank and Clean Science.

Diversification Opportunities for Jeju Bank and Clean Science

0.66

Correlation Coefficient

Jeju Bank  Clean Science

Poor diversification

The 3 months correlation between Jeju and Clean is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Bank and Clean Science co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Science co and Jeju Bank 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 Bank are associated (or correlated) with Clean Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Science co has no effect on the direction of Jeju Bank i.e., Jeju Bank and Clean Science go up and down completely randomly.

Pair Corralation between Jeju Bank and Clean Science

Assuming the 90 days trading horizon Jeju Bank is expected to generate 3.59 times less return on investment than Clean Science. In addition to that, Jeju Bank is 1.05 times more volatile than Clean Science co. It trades about 0.01 of its total potential returns per unit of risk. Clean Science co is currently generating about 0.04 per unit of volatility. If you would invest  518,000  in Clean Science co on October 24, 2024 and sell it today you would earn a total of  22,000  from holding Clean Science co or generate 4.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Jeju Bank  vs.  Clean Science co

Jeju Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jeju Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jeju Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clean Science co

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Science co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Clean Science is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jeju Bank and Clean Science

The main advantage of trading using opposite Jeju Bank and Clean Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Bank position performs unexpectedly, Clean Science 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 Clean Science will offset losses from the drop in Clean Science's long position.

The idea behind Jeju Bank and Clean Science co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..