Correlation Between Jeil Steel and Kwang Jin
Can any of the company-specific risk be diversified away by investing in both Jeil Steel and Kwang Jin 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 Kwang Jin 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 Kwang Jin Ind, you can compare the effects of market volatilities on Jeil Steel and Kwang Jin 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 Kwang Jin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeil Steel and Kwang Jin.
Diversification Opportunities for Jeil Steel and Kwang Jin
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jeil and Kwang is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and Kwang Jin Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwang Jin Ind 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 Kwang Jin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwang Jin Ind has no effect on the direction of Jeil Steel i.e., Jeil Steel and Kwang Jin go up and down completely randomly.
Pair Corralation between Jeil Steel and Kwang Jin
Assuming the 90 days trading horizon Jeil Steel Mfg is expected to generate 2.81 times more return on investment than Kwang Jin. However, Jeil Steel is 2.81 times more volatile than Kwang Jin Ind. It trades about 0.07 of its potential returns per unit of risk. Kwang Jin Ind is currently generating about 0.08 per unit of risk. If you would invest 177,300 in Jeil Steel Mfg on September 19, 2024 and sell it today you would earn a total of 9,800 from holding Jeil Steel Mfg or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeil Steel Mfg vs. Kwang Jin Ind
Performance |
| Timeline |
| Jeil Steel Mfg |
| Kwang Jin Ind |
Jeil Steel and Kwang Jin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeil Steel and Kwang Jin
The main advantage of trading using opposite Jeil Steel and Kwang Jin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeil Steel position performs unexpectedly, Kwang Jin 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 Kwang Jin will offset losses from the drop in Kwang Jin's long position.| Jeil Steel vs. Keum Kang Steel | Jeil Steel vs. Samhyun Steel Co | Jeil Steel vs. Gyeongnam Steel Co | Jeil Steel vs. Wonil Special Steel |
| Kwang Jin vs. Golden Bridge Investment | Kwang Jin vs. Daewon Media Co | Kwang Jin vs. SBI Investment KOREA | Kwang Jin vs. Sangsangin 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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