Correlation Between Jeju Beer and Moadata

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

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

Diversification Opportunities for Jeju Beer and Moadata

0.5

Correlation Coefficient

Jeju Beer  Moadata

Very weak diversification

The 3 months correlation between Jeju and Moadata is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and Moadata Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moadata and Jeju Beer 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 Beer Co are associated (or correlated) with Moadata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moadata has no effect on the direction of Jeju Beer i.e., Jeju Beer and Moadata go up and down completely randomly.

Pair Corralation between Jeju Beer and Moadata

Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the Moadata. In addition to that, Jeju Beer is 1.11 times more volatile than Moadata Co. It trades about -0.15 of its total potential returns per unit of risk. Moadata Co is currently generating about -0.1 per unit of volatility. If you would invest  126,400  in Moadata Co on December 24, 2024 and sell it today you would lose (22,200) from holding Moadata Co or give up 17.56% of portfolio value over 90 days.

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

Jeju Beer Co  vs.  Moadata Co

Jeju Beer

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jeju Beer Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Moadata

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moadata Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Jeju Beer and Moadata

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

The idea behind Jeju Beer Co and Moadata 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.