Correlation Between ChipsMedia and J Steel
Can any of the company-specific risk be diversified away by investing in both ChipsMedia 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 ChipsMedia and J Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChipsMedia and J Steel Co, you can compare the effects of market volatilities on ChipsMedia 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 ChipsMedia with a short position of J Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChipsMedia and J Steel.
Diversification Opportunities for ChipsMedia and J Steel
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ChipsMedia and 023440 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding ChipsMedia and J Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Steel and ChipsMedia 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 ChipsMedia 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 ChipsMedia i.e., ChipsMedia and J Steel go up and down completely randomly.
Pair Corralation between ChipsMedia and J Steel
Assuming the 90 days trading horizon ChipsMedia is expected to generate 2.78 times more return on investment than J Steel. However, ChipsMedia is 2.78 times more volatile than J Steel Co. It trades about 0.24 of its potential returns per unit of risk. J Steel Co is currently generating about -0.36 per unit of risk. If you would invest 1,645,000 in ChipsMedia on November 3, 2024 and sell it today you would earn a total of 319,000 from holding ChipsMedia or generate 19.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChipsMedia vs. J Steel Co
Performance |
| Timeline |
| ChipsMedia |
| J Steel |
ChipsMedia and J Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChipsMedia and J Steel
The main advantage of trading using opposite ChipsMedia and J Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipsMedia 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.| ChipsMedia vs. Formetal Co | ChipsMedia vs. LG Display Co | ChipsMedia vs. Daiyang Metal Co | ChipsMedia vs. Nable Communications |
| J Steel vs. Anam Electronics Co | J Steel vs. Sung Bo Chemicals | J Steel vs. KyungIn Electronics Co | J Steel vs. Samji Electronics 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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