Correlation Between J Steel and Daeduck Electronics
Can any of the company-specific risk be diversified away by investing in both J Steel and Daeduck 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 Daeduck 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 Daeduck Electronics Co, you can compare the effects of market volatilities on J Steel and Daeduck 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 Daeduck Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Steel and Daeduck Electronics.
Diversification Opportunities for J Steel and Daeduck Electronics
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between 023440 and Daeduck is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and Daeduck Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daeduck 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 Daeduck Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daeduck Electronics has no effect on the direction of J Steel i.e., J Steel and Daeduck Electronics go up and down completely randomly.
Pair Corralation between J Steel and Daeduck Electronics
Assuming the 90 days trading horizon J Steel Co is expected to generate 5.43 times more return on investment than Daeduck Electronics. However, J Steel is 5.43 times more volatile than Daeduck Electronics Co. It trades about 0.01 of its potential returns per unit of risk. Daeduck Electronics Co is currently generating about 0.02 per unit of risk. If you would invest 235,500 in J Steel Co on December 1, 2024 and sell it today you would lose (49,700) from holding J Steel Co or give up 21.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Steel Co vs. Daeduck Electronics Co
Performance |
| Timeline |
| J Steel |
| Daeduck Electronics |
J Steel and Daeduck Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Steel and Daeduck Electronics
The main advantage of trading using opposite J Steel and Daeduck Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Steel position performs unexpectedly, Daeduck 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 Daeduck Electronics will offset losses from the drop in Daeduck Electronics' long position.| J Steel vs. PlayD Co | J Steel vs. SBI Investment KOREA | J Steel vs. Daol Investment Securities | J Steel vs. PLAYWITH |
| Daeduck Electronics vs. Nam Hwa Construction | Daeduck Electronics vs. Tuksu Engineering ConstructionLtd | Daeduck Electronics vs. Ssangyong Information Communication | Daeduck Electronics vs. Dongwoo Farm To |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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