Correlation Between Jin Air and SCI Information
Can any of the company-specific risk be diversified away by investing in both Jin Air and SCI Information 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 Jin Air and SCI Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jin Air Co and SCI Information Service, you can compare the effects of market volatilities on Jin Air and SCI Information 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 Jin Air with a short position of SCI Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and SCI Information.
Diversification Opportunities for Jin Air and SCI Information
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jin and SCI is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air Co and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service and Jin Air 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 Jin Air Co are associated (or correlated) with SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of Jin Air i.e., Jin Air and SCI Information go up and down completely randomly.
Pair Corralation between Jin Air and SCI Information
Assuming the 90 days trading horizon Jin Air Co is expected to under-perform the SCI Information. In addition to that, Jin Air is 1.53 times more volatile than SCI Information Service. It trades about -0.02 of its total potential returns per unit of risk. SCI Information Service is currently generating about 0.03 per unit of volatility. If you would invest 224,000 in SCI Information Service on September 25, 2024 and sell it today you would earn a total of 3,500 from holding SCI Information Service or generate 1.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Jin Air Co vs. SCI Information Service
Performance |
Timeline |
Jin Air |
SCI Information Service |
Jin Air and SCI Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jin Air and SCI Information
The main advantage of trading using opposite Jin Air and SCI Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air position performs unexpectedly, SCI Information 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 SCI Information will offset losses from the drop in SCI Information's long position.Jin Air vs. Cheryong Industrial CoLtd | Jin Air vs. Dongbu Insurance Co | Jin Air vs. iNtRON Biotechnology | Jin Air vs. Korean Reinsurance Co |
SCI Information vs. Alton Sports CoLtd | SCI Information vs. Jeju Air Co | SCI Information vs. Jin Air Co | SCI Information vs. Air Busan 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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