Correlation Between Dongyang and Jeil Steel
Can any of the company-specific risk be diversified away by investing in both Dongyang 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 Dongyang and Jeil Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongyang EP and Jeil Steel Mfg, you can compare the effects of market volatilities on Dongyang 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 Dongyang with a short position of Jeil Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongyang and Jeil Steel.
Diversification Opportunities for Dongyang and Jeil Steel
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dongyang and Jeil is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dongyang EP 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 Dongyang 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 Dongyang EP 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 Dongyang i.e., Dongyang and Jeil Steel go up and down completely randomly.
Pair Corralation between Dongyang and Jeil Steel
Assuming the 90 days trading horizon Dongyang EP is expected to generate 0.43 times more return on investment than Jeil Steel. However, Dongyang EP is 2.32 times less risky than Jeil Steel. It trades about 0.11 of its potential returns per unit of risk. Jeil Steel Mfg is currently generating about -0.22 per unit of risk. If you would invest 1,772,934 in Dongyang EP on October 23, 2024 and sell it today you would earn a total of 32,066 from holding Dongyang EP or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Dongyang EP vs. Jeil Steel Mfg
Performance |
| Timeline |
| Dongyang EP |
| Jeil Steel Mfg |
Dongyang and Jeil Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongyang and Jeil Steel
The main advantage of trading using opposite Dongyang and Jeil Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongyang 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.| Dongyang vs. Humasis Co | Dongyang vs. Access Bio | Dongyang vs. Taewoong Logistics CoLtd | Dongyang vs. Hana Financial 7 |
| Jeil Steel vs. Air Busan Co | Jeil Steel vs. Barunson Entertainment Arts | Jeil Steel vs. Digital Multimedia Technology | Jeil Steel vs. Kaonmedia 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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