Correlation Between Samwha Electronics and Jeil Steel

Can any of the company-specific risk be diversified away by investing in both Samwha Electronics 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 Samwha Electronics and Jeil Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samwha Electronics Co and Jeil Steel Mfg, you can compare the effects of market volatilities on Samwha Electronics 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 Samwha Electronics with a short position of Jeil Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samwha Electronics and Jeil Steel.

Diversification Opportunities for Samwha Electronics and Jeil Steel

-0.12

Correlation Coefficient

Samwha Electronics  Jeil Steel

Good diversification

The 3 months correlation between Samwha and Jeil is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Samwha Electronics 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 Samwha Electronics 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 Samwha Electronics 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 Samwha Electronics i.e., Samwha Electronics and Jeil Steel go up and down completely randomly.

Pair Corralation between Samwha Electronics and Jeil Steel

Assuming the 90 days trading horizon Samwha Electronics is expected to generate 3.59 times less return on investment than Jeil Steel. In addition to that, Samwha Electronics is 1.06 times more volatile than Jeil Steel Mfg. It trades about 0.03 of its total potential returns per unit of risk. Jeil Steel Mfg is currently generating about 0.12 per unit of volatility. If you would invest  135,100  in Jeil Steel Mfg on September 12, 2024 and sell it today you would earn a total of  42,700  from holding Jeil Steel Mfg or generate 31.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Samwha Electronics Co  vs.  Jeil Steel Mfg

Samwha Electronics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samwha Electronics Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samwha Electronics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jeil Steel Mfg

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jeil Steel Mfg are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jeil Steel sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samwha Electronics and Jeil Steel

The main advantage of trading using opposite Samwha Electronics and Jeil Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samwha Electronics 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.

The idea behind Samwha Electronics Co and Jeil Steel Mfg pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.