Correlation Between United States and J Long
Can any of the company-specific risk be diversified away by investing in both United States and J Long 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 United States and J Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and J Long Group Limited, you can compare the effects of market volatilities on United States and J Long 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 United States with a short position of J Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and J Long.
Diversification Opportunities for United States and J Long
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between United and J Long is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group and United States 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 United States Steel are associated (or correlated) with J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of United States i.e., United States and J Long go up and down completely randomly.
Pair Corralation between United States and J Long
Taking into account the 90-day investment horizon United States Steel is expected to generate 0.49 times more return on investment than J Long. However, United States Steel is 2.06 times less risky than J Long. It trades about -0.14 of its potential returns per unit of risk. J Long Group Limited is currently generating about -0.21 per unit of risk. If you would invest 4,025 in United States Steel on September 12, 2024 and sell it today you would lose (499.00) from holding United States Steel or give up 12.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. J Long Group Limited
Performance |
| Timeline |
| United States Steel |
| J Long Group |
United States and J Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and J Long
The main advantage of trading using opposite United States and J Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, J Long 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 Long will offset losses from the drop in J Long's long position.| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
| J Long vs. Ermenegildo Zegna NV | J Long vs. Columbia Sportswear | J Long vs. Gildan Activewear | J Long vs. G III Apparel Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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