Correlation Between J Steel and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both J Steel and Korea Alcohol 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 Korea Alcohol 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 Korea Alcohol Industrial, you can compare the effects of market volatilities on J Steel and Korea Alcohol 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 Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Steel and Korea Alcohol.
Diversification Opportunities for J Steel and Korea Alcohol
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 023440 and Korea is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of J Steel i.e., J Steel and Korea Alcohol go up and down completely randomly.
Pair Corralation between J Steel and Korea Alcohol
Assuming the 90 days trading horizon J Steel Co is expected to generate 2.1 times more return on investment than Korea Alcohol. However, J Steel is 2.1 times more volatile than Korea Alcohol Industrial. It trades about 0.0 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about 0.0 per unit of risk. If you would invest 273,000 in J Steel Co on October 14, 2024 and sell it today you would lose (109,900) from holding J Steel Co or give up 40.26% 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. Korea Alcohol Industrial
Performance |
| Timeline |
| J Steel |
| Korea Alcohol Industrial |
J Steel and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Steel and Korea Alcohol
The main advantage of trading using opposite J Steel and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Steel position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| J Steel vs. Koryo Credit Information | J Steel vs. Guyoung Technology Co | J Steel vs. KB Financial Group | J Steel vs. DB Insurance Co |
| Korea Alcohol vs. J Steel Co | Korea Alcohol vs. Hankuk Steel Wire | Korea Alcohol vs. ECSTELECOM Co | Korea Alcohol vs. Daehan Steel |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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