Correlation Between J Steel and Hana Materials
Can any of the company-specific risk be diversified away by investing in both J Steel and Hana Materials 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 Hana Materials 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 Hana Materials, you can compare the effects of market volatilities on J Steel and Hana Materials 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 Hana Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Steel and Hana Materials.
Diversification Opportunities for J Steel and Hana Materials
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 023440 and Hana is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and Hana Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Materials 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 Hana Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Materials has no effect on the direction of J Steel i.e., J Steel and Hana Materials go up and down completely randomly.
Pair Corralation between J Steel and Hana Materials
Assuming the 90 days trading horizon J Steel Co is expected to under-perform the Hana Materials. In addition to that, J Steel is 1.56 times more volatile than Hana Materials. It trades about -0.09 of its total potential returns per unit of risk. Hana Materials is currently generating about 0.04 per unit of volatility. If you would invest 2,620,000 in Hana Materials on October 11, 2024 and sell it today you would earn a total of 100,000 from holding Hana Materials or generate 3.82% 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. Hana Materials
Performance |
| Timeline |
| J Steel |
| Hana Materials |
J Steel and Hana Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Steel and Hana Materials
The main advantage of trading using opposite J Steel and Hana Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Steel position performs unexpectedly, Hana Materials 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 Hana Materials will offset losses from the drop in Hana Materials' long position.| J Steel vs. GS Retail Co | J Steel vs. Hanmi Semiconductor Co | J Steel vs. Clean Science co | J Steel vs. KCC Engineering Construction |
| Hana Materials vs. Seah Steel Corp | Hana Materials vs. DB Financial Investment | Hana Materials vs. J Steel Co | Hana Materials vs. KTB Investment Securities |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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