Correlation Between NewFlex Technology and J Steel
Can any of the company-specific risk be diversified away by investing in both NewFlex Technology and J 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 NewFlex Technology and J Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewFlex Technology Co and J Steel Co, you can compare the effects of market volatilities on NewFlex Technology and J 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 NewFlex Technology with a short position of J Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewFlex Technology and J Steel.
Diversification Opportunities for NewFlex Technology and J Steel
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between NewFlex and 023440 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NewFlex Technology Co and J Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Steel and NewFlex Technology 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 NewFlex Technology Co are associated (or correlated) with J Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Steel has no effect on the direction of NewFlex Technology i.e., NewFlex Technology and J Steel go up and down completely randomly.
Pair Corralation between NewFlex Technology and J Steel
Assuming the 90 days trading horizon NewFlex Technology Co is expected to under-perform the J Steel. But the stock apears to be less risky and, when comparing its historical volatility, NewFlex Technology Co is 1.3 times less risky than J Steel. The stock trades about -0.09 of its potential returns per unit of risk. The J Steel Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 126,400 in J Steel Co on September 3, 2024 and sell it today you would earn a total of 52,600 from holding J Steel Co or generate 41.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewFlex Technology Co vs. J Steel Co
Performance |
| Timeline |
| NewFlex Technology |
| J Steel |
NewFlex Technology and J Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewFlex Technology and J Steel
The main advantage of trading using opposite NewFlex Technology and J Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewFlex Technology position performs unexpectedly, J 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 J Steel will offset losses from the drop in J Steel's long position.| NewFlex Technology vs. Dongsin Engineering Construction | NewFlex Technology vs. Doosan Fuel Cell | NewFlex Technology vs. Daishin Balance 1 | NewFlex Technology vs. Total Soft Bank |
| J Steel vs. Samsung Electronics Co | J Steel vs. Samsung Electronics Co | J Steel vs. LG Energy Solution | J Steel vs. SK Hynix |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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