Correlation Between Jeil Steel and Dongyang
Can any of the company-specific risk be diversified away by investing in both Jeil Steel and Dongyang 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 Dongyang 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 Dongyang EP, you can compare the effects of market volatilities on Jeil Steel and Dongyang 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 Dongyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeil Steel and Dongyang.
Diversification Opportunities for Jeil Steel and Dongyang
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jeil and Dongyang is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and Dongyang EP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongyang EP 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 Dongyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongyang EP has no effect on the direction of Jeil Steel i.e., Jeil Steel and Dongyang go up and down completely randomly.
Pair Corralation between Jeil Steel and Dongyang
Assuming the 90 days trading horizon Jeil Steel Mfg is expected to under-perform the Dongyang. In addition to that, Jeil Steel is 2.31 times more volatile than Dongyang EP. It trades about -0.27 of its total potential returns per unit of risk. Dongyang EP is currently generating about 0.11 per unit of volatility. If you would invest 1,772,934 in Dongyang EP on October 24, 2024 and sell it today you would earn a total of 32,066 from holding Dongyang EP or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeil Steel Mfg vs. Dongyang EP
Performance |
| Timeline |
| Jeil Steel Mfg |
| Dongyang EP |
Jeil Steel and Dongyang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeil Steel and Dongyang
The main advantage of trading using opposite Jeil Steel and Dongyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeil Steel position performs unexpectedly, Dongyang 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 Dongyang will offset losses from the drop in Dongyang's long position.| Jeil Steel vs. Han Kook Steel | Jeil Steel vs. Jb Financial | Jeil Steel vs. Korea Steel Co | Jeil Steel vs. Bookook Steel |
| Dongyang vs. Humasis Co | Dongyang vs. Access Bio | Dongyang vs. Taewoong Logistics CoLtd | Dongyang vs. Hana Financial 7 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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