Correlation Between Samsung Electronics and Jeil Steel
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics 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 Samsung Electronics and Jeil Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Jeil Steel Mfg, you can compare the effects of market volatilities on Samsung Electronics 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 Samsung Electronics with a short position of Jeil Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Jeil Steel.
Diversification Opportunities for Samsung Electronics and Jeil Steel
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Jeil is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co 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 Samsung Electronics 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 Samsung Electronics Co 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 Samsung Electronics i.e., Samsung Electronics and Jeil Steel go up and down completely randomly.
Pair Corralation between Samsung Electronics and Jeil Steel
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 12.04 times less return on investment than Jeil Steel. But when comparing it to its historical volatility, Samsung Electronics Co is 2.16 times less risky than Jeil Steel. It trades about 0.02 of its potential returns per unit of risk. Jeil Steel Mfg is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 169,600 in Jeil Steel Mfg on August 29, 2024 and sell it today you would earn a total of 18,200 from holding Jeil Steel Mfg or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Jeil Steel Mfg
Performance |
| Timeline |
| Samsung Electronics |
| Jeil Steel Mfg |
Samsung Electronics and Jeil Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Jeil Steel
The main advantage of trading using opposite Samsung Electronics and Jeil Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics 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.| Samsung Electronics vs. JYP Entertainment | Samsung Electronics vs. Samsung Heavy Industries | Samsung Electronics vs. Hanjinkal |
| Jeil Steel vs. SK Telecom Co | Jeil Steel vs. Nable Communications | Jeil Steel vs. POSCO M TECH Co | Jeil Steel vs. SS TECH |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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