Correlation Between J Steel and Korea Information
Can any of the company-specific risk be diversified away by investing in both J Steel and Korea Information 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 Information 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 Information Communications, you can compare the effects of market volatilities on J Steel and Korea Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Steel and Korea Information.
Diversification Opportunities for J Steel and Korea Information
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 023440 and Korea is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of J Steel i.e., J Steel and Korea Information go up and down completely randomly.
Pair Corralation between J Steel and Korea Information
Assuming the 90 days trading horizon J Steel Co is expected to generate 3.1 times more return on investment than Korea Information. However, J Steel is 3.1 times more volatile than Korea Information Communications. It trades about 0.08 of its potential returns per unit of risk. Korea Information Communications is currently generating about -0.02 per unit of risk. If you would invest 116,200 in J Steel Co on September 3, 2024 and sell it today you would earn a total of 62,800 from holding J Steel Co or generate 54.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Steel Co vs. Korea Information Communicatio
Performance |
| Timeline |
| J Steel |
| Korea Information |
J Steel and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Steel and Korea Information
The main advantage of trading using opposite J Steel and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Steel position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's 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 |
| Korea Information vs. Cloud Air CoLtd | Korea Information vs. Genie Music | Korea Information vs. Samlip General Foods | Korea Information vs. Organic Special Pet |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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