Correlation Between J Steel and Bookook Steel
Can any of the company-specific risk be diversified away by investing in both J Steel and Bookook 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 J Steel and Bookook Steel 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 Bookook Steel, you can compare the effects of market volatilities on J Steel and Bookook 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 J Steel with a short position of Bookook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Steel and Bookook Steel.
Diversification Opportunities for J Steel and Bookook Steel
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 023440 and Bookook is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and Bookook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bookook Steel 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 Bookook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bookook Steel has no effect on the direction of J Steel i.e., J Steel and Bookook Steel go up and down completely randomly.
Pair Corralation between J Steel and Bookook Steel
Assuming the 90 days trading horizon J Steel Co is expected to under-perform the Bookook Steel. In addition to that, J Steel is 1.19 times more volatile than Bookook Steel. It trades about -0.02 of its total potential returns per unit of risk. Bookook Steel is currently generating about 0.04 per unit of volatility. If you would invest 253,500 in Bookook Steel on January 22, 2025 and sell it today you would earn a total of 4,000 from holding Bookook Steel or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Steel Co vs. Bookook Steel
Performance |
| Timeline |
| J Steel |
| Bookook Steel |
J Steel and Bookook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Steel and Bookook Steel
The main advantage of trading using opposite J Steel and Bookook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Steel position performs unexpectedly, Bookook 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 Bookook Steel will offset losses from the drop in Bookook Steel'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 |
| Bookook Steel vs. Industrial Bank | Bookook Steel vs. Wing Yip Food | Bookook Steel vs. Dongbu Insurance Co | Bookook Steel vs. FOODWELL Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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