Correlation Between J Steel and DC Media
Can any of the company-specific risk be diversified away by investing in both J Steel and DC Media 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 DC Media 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 DC Media Co, you can compare the effects of market volatilities on J Steel and DC Media 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 DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Steel and DC Media.
Diversification Opportunities for J Steel and DC Media
Good diversification
The 3 months correlation between 023440 and 263720 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and DC Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC Media 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 DC Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC Media has no effect on the direction of J Steel i.e., J Steel and DC Media go up and down completely randomly.
Pair Corralation between J Steel and DC Media
Assuming the 90 days trading horizon J Steel is expected to generate 3.87 times less return on investment than DC Media. In addition to that, J Steel is 1.18 times more volatile than DC Media Co. It trades about 0.0 of its total potential returns per unit of risk. DC Media Co is currently generating about 0.01 per unit of volatility. If you would invest 2,615,000 in DC Media Co on October 11, 2024 and sell it today you would lose (480,000) from holding DC Media Co or give up 18.36% 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. DC Media Co
Performance |
| Timeline |
| J Steel |
| DC Media |
J Steel and DC Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Steel and DC Media
The main advantage of trading using opposite J Steel and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Steel position performs unexpectedly, DC Media 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 DC Media will offset losses from the drop in DC Media's 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 |
| DC Media vs. CU Tech Corp | DC Media vs. J Steel Co | DC Media vs. Hankook Steel Co | DC Media vs. Hironic 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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