Correlation Between Jeil Steel and Hankook Steel
Can any of the company-specific risk be diversified away by investing in both Jeil Steel and Hankook 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 Jeil Steel and Hankook Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeil Steel Mfg and Hankook Steel Co, you can compare the effects of market volatilities on Jeil Steel and Hankook 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 Jeil Steel with a short position of Hankook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeil Steel and Hankook Steel.
Diversification Opportunities for Jeil Steel and Hankook Steel
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jeil and Hankook is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and Hankook Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Steel and Jeil 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 Jeil Steel Mfg are associated (or correlated) with Hankook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Steel has no effect on the direction of Jeil Steel i.e., Jeil Steel and Hankook Steel go up and down completely randomly.
Pair Corralation between Jeil Steel and Hankook Steel
Assuming the 90 days trading horizon Jeil Steel Mfg is expected to under-perform the Hankook Steel. In addition to that, Jeil Steel is 1.17 times more volatile than Hankook Steel Co. It trades about -0.36 of its total potential returns per unit of risk. Hankook Steel Co is currently generating about -0.24 per unit of volatility. If you would invest 188,700 in Hankook Steel Co on November 3, 2024 and sell it today you would lose (11,100) from holding Hankook Steel Co or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeil Steel Mfg vs. Hankook Steel Co
Performance |
| Timeline |
| Jeil Steel Mfg |
| Hankook Steel |
Jeil Steel and Hankook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeil Steel and Hankook Steel
The main advantage of trading using opposite Jeil Steel and Hankook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeil Steel position performs unexpectedly, Hankook 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 Hankook Steel will offset losses from the drop in Hankook Steel's long position.| Jeil Steel vs. Samji Electronics Co | Jeil Steel vs. LEENO Industrial | Jeil Steel vs. Samyoung Electronics Co | Jeil Steel vs. Jahwa Electronics Co |
| Hankook Steel vs. Seers Technology | Hankook Steel vs. NewFlex Technology Co | Hankook Steel vs. Kisan Telecom Co | Hankook Steel vs. Seoul Electronics Telecom |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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