Correlation Between Jinro Distillers and Lindeman Asia

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

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

Diversification Opportunities for Jinro Distillers and Lindeman Asia

0.19

Correlation Coefficient

Jinro Distillers  Lindeman Asia

Average diversification

The 3 months correlation between Jinro and Lindeman is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jinro Distillers Co and Lindeman Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindeman Asia Investment and Jinro Distillers 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 Jinro Distillers Co are associated (or correlated) with Lindeman Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindeman Asia Investment has no effect on the direction of Jinro Distillers i.e., Jinro Distillers and Lindeman Asia go up and down completely randomly.

Pair Corralation between Jinro Distillers and Lindeman Asia

Assuming the 90 days trading horizon Jinro Distillers Co is expected to under-perform the Lindeman Asia. But the stock apears to be less risky and, when comparing its historical volatility, Jinro Distillers Co is 4.81 times less risky than Lindeman Asia. The stock trades about -0.07 of its potential returns per unit of risk. The Lindeman Asia Investment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  439,500  in Lindeman Asia Investment on September 15, 2024 and sell it today you would earn a total of  18,500  from holding Lindeman Asia Investment or generate 4.21% return on investment over 90 days.

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

Jinro Distillers Co  vs.  Lindeman Asia Investment

Jinro Distillers

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lindeman Asia Investment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lindeman Asia Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lindeman Asia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jinro Distillers and Lindeman Asia

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

The idea behind Jinro Distillers Co and Lindeman Asia Investment 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.