Correlation Between Dong A and Jeil Steel
Can any of the company-specific risk be diversified away by investing in both Dong A 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 Dong A and Jeil Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dong A Steel Technology and Jeil Steel Mfg, you can compare the effects of market volatilities on Dong A 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 Dong A with a short position of Jeil Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Jeil Steel.
Diversification Opportunities for Dong A and Jeil Steel
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dong and Jeil is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology 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 Dong A 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 Dong A Steel Technology 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 Dong A i.e., Dong A and Jeil Steel go up and down completely randomly.
Pair Corralation between Dong A and Jeil Steel
Assuming the 90 days trading horizon Dong A Steel Technology is expected to generate 0.56 times more return on investment than Jeil Steel. However, Dong A Steel Technology is 1.77 times less risky than Jeil Steel. It trades about -0.01 of its potential returns per unit of risk. Jeil Steel Mfg is currently generating about -0.01 per unit of risk. If you would invest 443,000 in Dong A Steel Technology on August 29, 2024 and sell it today you would lose (91,500) from holding Dong A Steel Technology or give up 20.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Steel Technology vs. Jeil Steel Mfg
Performance |
| Timeline |
| Dong A Steel |
| Jeil Steel Mfg |
Dong A and Jeil Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Jeil Steel
The main advantage of trading using opposite Dong A and Jeil Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A 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.| Dong A vs. AptaBio Therapeutics | Dong A vs. Daewoo SBI SPAC | Dong A vs. Dream Security co | Dong A vs. Microfriend |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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