Correlation Between J Steel and BIT Computer
Can any of the company-specific risk be diversified away by investing in both J Steel and BIT Computer 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 BIT Computer 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 BIT Computer Co, you can compare the effects of market volatilities on J Steel and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Steel and BIT Computer.
Diversification Opportunities for J Steel and BIT Computer
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 023440 and BIT is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of J Steel i.e., J Steel and BIT Computer go up and down completely randomly.
Pair Corralation between J Steel and BIT Computer
Assuming the 90 days trading horizon J Steel Co is expected to under-perform the BIT Computer. In addition to that, J Steel is 1.3 times more volatile than BIT Computer Co. It trades about -0.31 of its total potential returns per unit of risk. BIT Computer Co is currently generating about 0.08 per unit of volatility. If you would invest 494,636 in BIT Computer Co on October 14, 2024 and sell it today you would earn a total of 12,364 from holding BIT Computer Co or generate 2.5% 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. BIT Computer Co
Performance |
| Timeline |
| J Steel |
| BIT Computer |
J Steel and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Steel and BIT Computer
The main advantage of trading using opposite J Steel and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Steel position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| J Steel vs. Choil Aluminum | J Steel vs. JYP Entertainment Corp | J Steel vs. Daejung Chemicals Metals | J Steel vs. Lotte Chilsung Beverage |
| BIT Computer vs. Anam Electronics Co | BIT Computer vs. J Steel Co | BIT Computer vs. Shin Steel Co | BIT Computer vs. Moonbae 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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