Correlation Between Jeil Steel and NCsoft Corp
Can any of the company-specific risk be diversified away by investing in both Jeil Steel and NCsoft Corp 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 NCsoft Corp 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 NCsoft Corp, you can compare the effects of market volatilities on Jeil Steel and NCsoft Corp 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 NCsoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeil Steel and NCsoft Corp.
Diversification Opportunities for Jeil Steel and NCsoft Corp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jeil and NCsoft is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and NCsoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCsoft Corp 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 NCsoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCsoft Corp has no effect on the direction of Jeil Steel i.e., Jeil Steel and NCsoft Corp go up and down completely randomly.
Pair Corralation between Jeil Steel and NCsoft Corp
Assuming the 90 days trading horizon Jeil Steel Mfg is expected to under-perform the NCsoft Corp. In addition to that, Jeil Steel is 1.43 times more volatile than NCsoft Corp. It trades about -0.12 of its total potential returns per unit of risk. NCsoft Corp is currently generating about -0.01 per unit of volatility. If you would invest 20,550,000 in NCsoft Corp on September 13, 2024 and sell it today you would lose (500,000) from holding NCsoft Corp or give up 2.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Jeil Steel Mfg vs. NCsoft Corp
Performance |
Timeline |
Jeil Steel Mfg |
NCsoft Corp |
Jeil Steel and NCsoft Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jeil Steel and NCsoft Corp
The main advantage of trading using opposite Jeil Steel and NCsoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeil Steel position performs unexpectedly, NCsoft Corp 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 NCsoft Corp will offset losses from the drop in NCsoft Corp'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 |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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