Correlation Between Jeil Steel and Shin Steel
Can any of the company-specific risk be diversified away by investing in both Jeil Steel and Shin Steel 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 Shin Steel 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 Shin Steel Co, you can compare the effects of market volatilities on Jeil Steel and Shin Steel 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 Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeil Steel and Shin Steel.
Diversification Opportunities for Jeil Steel and Shin Steel
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jeil and Shin is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel 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 Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of Jeil Steel i.e., Jeil Steel and Shin Steel go up and down completely randomly.
Pair Corralation between Jeil Steel and Shin Steel
Assuming the 90 days trading horizon Jeil Steel Mfg is expected to generate 1.66 times more return on investment than Shin Steel. However, Jeil Steel is 1.66 times more volatile than Shin Steel Co. It trades about -0.07 of its potential returns per unit of risk. Shin Steel Co is currently generating about -0.15 per unit of risk. If you would invest 204,000 in Jeil Steel Mfg on September 12, 2024 and sell it today you would lose (26,200) from holding Jeil Steel Mfg or give up 12.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Jeil Steel Mfg vs. Shin Steel Co
Performance |
| Timeline |
| Jeil Steel Mfg |
| Shin Steel |
Jeil Steel and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeil Steel and Shin Steel
The main advantage of trading using opposite Jeil Steel and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeil Steel position performs unexpectedly, Shin Steel 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 Shin Steel will offset losses from the drop in Shin Steel's long position.| Jeil Steel vs. SEOJEON ELECTRIC MACHINERY | Jeil Steel vs. DB Insurance Co | Jeil Steel vs. Settlebank | Jeil Steel vs. Seoam Machinery Industry |
| Shin Steel vs. FOODWELL Co | Shin Steel vs. Daejung Chemicals Metals | Shin Steel vs. Haitai Confectionery Foods | Shin Steel vs. CJ Seafood Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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