Correlation Between J Steel and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both J Steel and Samsung Electronics 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 J Steel and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Steel Co and Samsung Electronics Co, you can compare the effects of market volatilities on J Steel and Samsung Electronics 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 J Steel with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Steel and Samsung Electronics.
Diversification Opportunities for J Steel and Samsung Electronics
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 023440 and Samsung is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and J Steel 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 J Steel Co are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of J Steel i.e., J Steel and Samsung Electronics go up and down completely randomly.
Pair Corralation between J Steel and Samsung Electronics
Assuming the 90 days trading horizon J Steel Co is expected to generate 3.14 times more return on investment than Samsung Electronics. However, J Steel is 3.14 times more volatile than Samsung Electronics Co. It trades about 0.0 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 299,500 in J Steel Co on September 3, 2024 and sell it today you would lose (120,500) from holding J Steel Co or give up 40.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Steel Co vs. Samsung Electronics Co
Performance |
| Timeline |
| J Steel |
| Samsung Electronics |
J Steel and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Steel and Samsung Electronics
The main advantage of trading using opposite J Steel and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Steel position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| J Steel vs. Samsung Electronics Co | J Steel vs. Samsung Electronics Co | J Steel vs. LG Energy Solution | J Steel vs. SK Hynix |
| Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. UNISEM Co | Samsung Electronics vs. RPBio Inc | Samsung Electronics vs. Finebesteel |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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