Correlation Between Kia Corp and Jeil Steel
Can any of the company-specific risk be diversified away by investing in both Kia Corp and Jeil Steel 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 Kia Corp and Jeil Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kia Corp and Jeil Steel Mfg, you can compare the effects of market volatilities on Kia Corp and Jeil Steel 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 Kia Corp with a short position of Jeil Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and Jeil Steel.
Diversification Opportunities for Kia Corp and Jeil Steel
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kia and Jeil is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and Jeil Steel Mfg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeil Steel Mfg and Kia Corp 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 Kia Corp are associated (or correlated) with Jeil Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeil Steel Mfg has no effect on the direction of Kia Corp i.e., Kia Corp and Jeil Steel go up and down completely randomly.
Pair Corralation between Kia Corp and Jeil Steel
Assuming the 90 days trading horizon Kia Corp is expected to generate 2.7 times less return on investment than Jeil Steel. But when comparing it to its historical volatility, Kia Corp is 2.62 times less risky than Jeil Steel. It trades about 0.03 of its potential returns per unit of risk. Jeil Steel Mfg is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 177,800 in Jeil Steel Mfg on September 1, 2024 and sell it today you would earn a total of 1,200 from holding Jeil Steel Mfg or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kia Corp vs. Jeil Steel Mfg
Performance |
| Timeline |
| Kia Corp |
| Jeil Steel Mfg |
Kia Corp and Jeil Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and Jeil Steel
The main advantage of trading using opposite Kia Corp and Jeil Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, Jeil Steel 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 Jeil Steel will offset losses from the drop in Jeil Steel's long position.| Kia Corp vs. Hankuk Steel Wire | Kia Corp vs. Finebesteel | Kia Corp vs. Histeel | Kia Corp vs. Nable Communications |
| Jeil Steel vs. Keum Kang Steel | Jeil Steel vs. Tplex Co | Jeil Steel vs. Gyeongnam Steel Co | Jeil Steel vs. Daedong Steel 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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