Correlation Between Jeil Steel and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Jeil Steel and Hyundai Engineering 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 Hyundai Engineering 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 Hyundai Engineering Plastics, you can compare the effects of market volatilities on Jeil Steel and Hyundai Engineering 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 Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeil Steel and Hyundai Engineering.
Diversification Opportunities for Jeil Steel and Hyundai Engineering
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jeil and Hyundai is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering 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 Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of Jeil Steel i.e., Jeil Steel and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Jeil Steel and Hyundai Engineering
Assuming the 90 days trading horizon Jeil Steel Mfg is expected to under-perform the Hyundai Engineering. In addition to that, Jeil Steel is 2.54 times more volatile than Hyundai Engineering Plastics. It trades about -0.12 of its total potential returns per unit of risk. Hyundai Engineering Plastics is currently generating about -0.14 per unit of volatility. If you would invest 374,000 in Hyundai Engineering Plastics on September 13, 2024 and sell it today you would lose (27,500) from holding Hyundai Engineering Plastics or give up 7.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeil Steel Mfg vs. Hyundai Engineering Plastics
Performance |
| Timeline |
| Jeil Steel Mfg |
| Hyundai Engineering |
Jeil Steel and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeil Steel and Hyundai Engineering
The main advantage of trading using opposite Jeil Steel and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeil Steel position performs unexpectedly, Hyundai Engineering 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 Hyundai Engineering will offset losses from the drop in Hyundai Engineering'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 |
| Hyundai Engineering vs. Samsung Electronics Co | Hyundai Engineering vs. Samsung Electronics Co | Hyundai Engineering vs. SK Hynix | Hyundai Engineering vs. POSCO Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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