Correlation Between JINS HOLDINGS and Steel Dynamics
Can any of the company-specific risk be diversified away by investing in both JINS HOLDINGS and Steel Dynamics 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 JINS HOLDINGS and Steel Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JINS HOLDINGS INC and Steel Dynamics, you can compare the effects of market volatilities on JINS HOLDINGS and Steel Dynamics 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 JINS HOLDINGS with a short position of Steel Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JINS HOLDINGS and Steel Dynamics.
Diversification Opportunities for JINS HOLDINGS and Steel Dynamics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JINS and Steel is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding JINS HOLDINGS INC and Steel Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Dynamics and JINS HOLDINGS 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 JINS HOLDINGS INC are associated (or correlated) with Steel Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Dynamics has no effect on the direction of JINS HOLDINGS i.e., JINS HOLDINGS and Steel Dynamics go up and down completely randomly.
Pair Corralation between JINS HOLDINGS and Steel Dynamics
Assuming the 90 days horizon JINS HOLDINGS is expected to generate 2.13 times less return on investment than Steel Dynamics. But when comparing it to its historical volatility, JINS HOLDINGS INC is 1.9 times less risky than Steel Dynamics. It trades about 0.12 of its potential returns per unit of risk. Steel Dynamics is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 12,378 in Steel Dynamics on August 31, 2024 and sell it today you would earn a total of 1,130 from holding Steel Dynamics or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JINS HOLDINGS INC vs. Steel Dynamics
Performance |
| Timeline |
| JINS HOLDINGS INC |
| Steel Dynamics |
JINS HOLDINGS and Steel Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JINS HOLDINGS and Steel Dynamics
The main advantage of trading using opposite JINS HOLDINGS and Steel Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JINS HOLDINGS position performs unexpectedly, Steel Dynamics 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 Steel Dynamics will offset losses from the drop in Steel Dynamics' long position.| JINS HOLDINGS vs. ESSILORLUXOTTICA 12ON | JINS HOLDINGS vs. Intuitive Surgical | JINS HOLDINGS vs. EssilorLuxottica Socit anonyme | JINS HOLDINGS vs. Becton Dickinson and |
| Steel Dynamics vs. AUTO TRADER ADR | Steel Dynamics vs. SIDETRADE EO 1 | Steel Dynamics vs. Tradeweb Markets | Steel Dynamics vs. ON SEMICONDUCTOR |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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