Correlation Between Ajusteel and Ni Steel
Can any of the company-specific risk be diversified away by investing in both Ajusteel and Ni 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 Ajusteel and Ni Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ajusteel Co and Ni Steel, you can compare the effects of market volatilities on Ajusteel and Ni 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 Ajusteel with a short position of Ni Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ajusteel and Ni Steel.
Diversification Opportunities for Ajusteel and Ni Steel
Poor diversification
The 3 months correlation between Ajusteel and 008260 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ajusteel Co and Ni Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ni Steel and Ajusteel 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 Ajusteel Co are associated (or correlated) with Ni Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ni Steel has no effect on the direction of Ajusteel i.e., Ajusteel and Ni Steel go up and down completely randomly.
Pair Corralation between Ajusteel and Ni Steel
Assuming the 90 days trading horizon Ajusteel Co is expected to under-perform the Ni Steel. In addition to that, Ajusteel is 1.03 times more volatile than Ni Steel. It trades about -0.15 of its total potential returns per unit of risk. Ni Steel is currently generating about -0.03 per unit of volatility. If you would invest 383,500 in Ni Steel on November 3, 2024 and sell it today you would lose (31,000) from holding Ni Steel or give up 8.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ajusteel Co vs. Ni Steel
Performance |
| Timeline |
| Ajusteel |
| Ni Steel |
Ajusteel and Ni Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ajusteel and Ni Steel
The main advantage of trading using opposite Ajusteel and Ni Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ajusteel position performs unexpectedly, Ni 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 Ni Steel will offset losses from the drop in Ni Steel's long position.| Ajusteel vs. Worldex Industry Trading | Ajusteel vs. TS Investment Corp | Ajusteel vs. Sempio Foods Co | Ajusteel vs. Nh Investment And |
| Ni Steel vs. V One Tech Co | Ni Steel vs. CG Hi Tech | Ni Steel vs. Green Cross Medical | Ni Steel vs. Dongwoon Anatech 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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