Correlation Between Jeil Steel and SV Investment

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Can any of the company-specific risk be diversified away by investing in both Jeil Steel and SV Investment 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 SV Investment 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 SV Investment, you can compare the effects of market volatilities on Jeil Steel and SV Investment 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 SV Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeil Steel and SV Investment.

Diversification Opportunities for Jeil Steel and SV Investment

-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Jeil and 289080 is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and SV Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SV Investment 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 SV Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SV Investment has no effect on the direction of Jeil Steel i.e., Jeil Steel and SV Investment go up and down completely randomly.

Pair Corralation between Jeil Steel and SV Investment

Assuming the 90 days trading horizon Jeil Steel Mfg is expected to generate 1.55 times more return on investment than SV Investment. However, Jeil Steel is 1.55 times more volatile than SV Investment. It trades about -0.01 of its potential returns per unit of risk. SV Investment is currently generating about -0.03 per unit of risk. If you would invest  286,000  in Jeil Steel Mfg on September 12, 2024 and sell it today you would lose (108,200) from holding Jeil Steel Mfg or give up 37.83% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Jeil Steel Mfg  vs.  SV Investment

 Performance 
       Timeline  
Jeil Steel Mfg 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Jeil Steel Mfg are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jeil Steel sustained solid returns over the last few months and may actually be approaching a breakup point.
SV Investment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SV Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Jeil Steel and SV Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jeil Steel and SV Investment

The main advantage of trading using opposite Jeil Steel and SV Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeil Steel position performs unexpectedly, SV Investment 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 SV Investment will offset losses from the drop in SV Investment's long position.
The idea behind Jeil Steel Mfg and SV Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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