Correlation Between Keum Kang and Jeil Steel
Can any of the company-specific risk be diversified away by investing in both Keum Kang and Jeil 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 Keum Kang and Jeil Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keum Kang Steel and Jeil Steel Mfg, you can compare the effects of market volatilities on Keum Kang and Jeil 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 Keum Kang with a short position of Jeil Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keum Kang and Jeil Steel.
Diversification Opportunities for Keum Kang and Jeil Steel
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Keum and Jeil is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Keum Kang Steel and Jeil Steel Mfg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeil Steel Mfg and Keum Kang 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 Keum Kang Steel are associated (or correlated) with Jeil Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeil Steel Mfg has no effect on the direction of Keum Kang i.e., Keum Kang and Jeil Steel go up and down completely randomly.
Pair Corralation between Keum Kang and Jeil Steel
Assuming the 90 days trading horizon Keum Kang Steel is expected to under-perform the Jeil Steel. But the stock apears to be less risky and, when comparing its historical volatility, Keum Kang Steel is 2.11 times less risky than Jeil Steel. The stock trades about -0.03 of its potential returns per unit of risk. The Jeil Steel Mfg is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 257,500 in Jeil Steel Mfg on October 20, 2024 and sell it today you would lose (96,000) from holding Jeil Steel Mfg or give up 37.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keum Kang Steel vs. Jeil Steel Mfg
Performance |
| Timeline |
| Keum Kang Steel |
| Jeil Steel Mfg |
Keum Kang and Jeil Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keum Kang and Jeil Steel
The main advantage of trading using opposite Keum Kang and Jeil Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keum Kang position performs unexpectedly, Jeil 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 Jeil Steel will offset losses from the drop in Jeil Steel's long position.| Keum Kang vs. Vissem Electronics Co | Keum Kang vs. Anam Electronics Co | Keum Kang vs. LG Household Healthcare | Keum Kang vs. Daeduck Electronics Co |
| Jeil Steel vs. Keum Kang Steel | Jeil Steel vs. Tplex Co | Jeil Steel vs. PJ Metal Co | Jeil Steel vs. Samhyun Steel Co |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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