Correlation Between GS Retail and J Steel
Can any of the company-specific risk be diversified away by investing in both GS Retail and J 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 GS Retail and J Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Retail Co and J Steel Co, you can compare the effects of market volatilities on GS Retail and J 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 GS Retail with a short position of J Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and J Steel.
Diversification Opportunities for GS Retail and J Steel
Significant diversification
The 3 months correlation between 007070 and 023440 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and J Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Steel and GS Retail 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 GS Retail Co are associated (or correlated) with J Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Steel has no effect on the direction of GS Retail i.e., GS Retail and J Steel go up and down completely randomly.
Pair Corralation between GS Retail and J Steel
Assuming the 90 days trading horizon GS Retail Co is expected to under-perform the J Steel. But the stock apears to be less risky and, when comparing its historical volatility, GS Retail Co is 1.11 times less risky than J Steel. The stock trades about -0.36 of its potential returns per unit of risk. The J Steel Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 171,900 in J Steel Co on October 12, 2024 and sell it today you would lose (7,700) from holding J Steel Co or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 57.89% |
| Values | Daily Returns |
GS Retail Co vs. J Steel Co
Performance |
| Timeline |
| GS Retail |
| J Steel |
GS Retail and J Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Retail and J Steel
The main advantage of trading using opposite GS Retail and J Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Retail position performs unexpectedly, J 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 J Steel will offset losses from the drop in J Steel's long position.| GS Retail vs. AptaBio Therapeutics | GS Retail vs. Daewoo SBI SPAC | GS Retail vs. Dream Security co | GS Retail vs. Microfriend |
| J Steel vs. GS Retail Co | J Steel vs. Hanmi Semiconductor Co | J Steel vs. Clean Science co | J Steel vs. KCC Engineering Construction |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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