Correlation Between Jeju Beer and CS BEARING

Can any of the company-specific risk be diversified away by investing in both Jeju Beer and CS BEARING 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 CS BEARING 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 CS BEARING CoLtd, you can compare the effects of market volatilities on Jeju Beer and CS BEARING 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 CS BEARING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Beer and CS BEARING.

Diversification Opportunities for Jeju Beer and CS BEARING

-0.81

Correlation Coefficient

Jeju Beer  CS BEARING

Pay attention - limited upside

The 3 months correlation between Jeju and 297090 is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Beer Co and CS BEARING CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CS BEARING CoLtd 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 CS BEARING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CS BEARING CoLtd has no effect on the direction of Jeju Beer i.e., Jeju Beer and CS BEARING go up and down completely randomly.

Pair Corralation between Jeju Beer and CS BEARING

Assuming the 90 days trading horizon Jeju Beer Co is expected to under-perform the CS BEARING. But the stock apears to be less risky and, when comparing its historical volatility, Jeju Beer Co is 1.05 times less risky than CS BEARING. The stock trades about -0.06 of its potential returns per unit of risk. The CS BEARING CoLtd is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  428,000  in CS BEARING CoLtd on December 4, 2024 and sell it today you would earn a total of  152,000  from holding CS BEARING CoLtd or generate 35.51% return on investment over 90 days.

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

Jeju Beer Co  vs.  CS BEARING CoLtd

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.

CS BEARING CoLtd

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CS BEARING CoLtd are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CS BEARING sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jeju Beer and CS BEARING

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

The idea behind Jeju Beer Co and CS BEARING CoLtd 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.