Correlation Between J Steel and ChipsMedia
Can any of the company-specific risk be diversified away by investing in both J Steel and ChipsMedia 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 ChipsMedia 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 ChipsMedia, you can compare the effects of market volatilities on J Steel and ChipsMedia 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 ChipsMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Steel and ChipsMedia.
Diversification Opportunities for J Steel and ChipsMedia
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 023440 and ChipsMedia is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and ChipsMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipsMedia 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 ChipsMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipsMedia has no effect on the direction of J Steel i.e., J Steel and ChipsMedia go up and down completely randomly.
Pair Corralation between J Steel and ChipsMedia
Assuming the 90 days trading horizon J Steel Co is expected to under-perform the ChipsMedia. In addition to that, J Steel is 1.41 times more volatile than ChipsMedia. It trades about -0.12 of its total potential returns per unit of risk. ChipsMedia is currently generating about 0.01 per unit of volatility. If you would invest 1,307,000 in ChipsMedia on September 13, 2024 and sell it today you would lose (17,000) from holding ChipsMedia or give up 1.3% 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. ChipsMedia
Performance |
| Timeline |
| J Steel |
| ChipsMedia |
J Steel and ChipsMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Steel and ChipsMedia
The main advantage of trading using opposite J Steel and ChipsMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Steel position performs unexpectedly, ChipsMedia 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 ChipsMedia will offset losses from the drop in ChipsMedia'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 |
| ChipsMedia vs. Lake Materials Co | ChipsMedia vs. Union Materials Corp | ChipsMedia vs. Ecoplastic | ChipsMedia vs. EV Advanced Material |
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 CEOs Directory module to screen CEOs from public companies around the world.
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