Correlation Between Pum Tech and Jeil Steel
Can any of the company-specific risk be diversified away by investing in both Pum Tech 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 Pum Tech and Jeil Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pum Tech Korea Co and Jeil Steel Mfg, you can compare the effects of market volatilities on Pum Tech 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 Pum Tech with a short position of Jeil Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pum Tech and Jeil Steel.
Diversification Opportunities for Pum Tech and Jeil Steel
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pum and Jeil is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Pum Tech Korea Co 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 Pum Tech 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 Pum Tech Korea Co 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 Pum Tech i.e., Pum Tech and Jeil Steel go up and down completely randomly.
Pair Corralation between Pum Tech and Jeil Steel
Assuming the 90 days trading horizon Pum Tech Korea Co is expected to generate 1.34 times more return on investment than Jeil Steel. However, Pum Tech is 1.34 times more volatile than Jeil Steel Mfg. It trades about 0.02 of its potential returns per unit of risk. Jeil Steel Mfg is currently generating about -0.14 per unit of risk. If you would invest 4,395,000 in Pum Tech Korea Co on November 7, 2024 and sell it today you would earn a total of 25,000 from holding Pum Tech Korea Co or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pum Tech Korea Co vs. Jeil Steel Mfg
Performance |
| Timeline |
| Pum Tech Korea |
| Jeil Steel Mfg |
Pum Tech and Jeil Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pum Tech and Jeil Steel
The main advantage of trading using opposite Pum Tech and Jeil Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pum Tech 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.| Pum Tech vs. Seung Il | Pum Tech vs. Hankukpackage Co | Pum Tech vs. Busan Industrial Co | Pum Tech vs. Busan Ind |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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