Correlation Between Jeil Steel and Tplex
Can any of the company-specific risk be diversified away by investing in both Jeil Steel and Tplex 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 Tplex 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 Tplex Co, you can compare the effects of market volatilities on Jeil Steel and Tplex 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 Tplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeil Steel and Tplex.
Diversification Opportunities for Jeil Steel and Tplex
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jeil and Tplex is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and Tplex Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tplex 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 Tplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tplex has no effect on the direction of Jeil Steel i.e., Jeil Steel and Tplex go up and down completely randomly.
Pair Corralation between Jeil Steel and Tplex
Assuming the 90 days trading horizon Jeil Steel Mfg is expected to generate 1.81 times more return on investment than Tplex. However, Jeil Steel is 1.81 times more volatile than Tplex Co. It trades about 0.11 of its potential returns per unit of risk. Tplex Co is currently generating about -0.08 per unit of risk. If you would invest 169,600 in Jeil Steel Mfg on August 29, 2024 and sell it today you would earn a total of 18,200 from holding Jeil Steel Mfg or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeil Steel Mfg vs. Tplex Co
Performance |
| Timeline |
| Jeil Steel Mfg |
| Tplex |
Jeil Steel and Tplex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeil Steel and Tplex
The main advantage of trading using opposite Jeil Steel and Tplex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeil Steel position performs unexpectedly, Tplex 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 Tplex will offset losses from the drop in Tplex's long position.| Jeil Steel vs. SK Telecom Co | Jeil Steel vs. Nable Communications | Jeil Steel vs. POSCO M TECH Co | Jeil Steel vs. SS TECH |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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