Correlation Between Jeil Steel and Korea Air

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

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

Diversification Opportunities for Jeil Steel and Korea Air

0.18

Correlation Coefficient

Jeil Steel  Korea Air

Average diversification

The 3 months correlation between Jeil and Korea is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and Korea Air Svc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Air Svc and Jeil Steel 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 Jeil Steel Mfg are associated (or correlated) with Korea Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Air Svc has no effect on the direction of Jeil Steel i.e., Jeil Steel and Korea Air go up and down completely randomly.

Pair Corralation between Jeil Steel and Korea Air

Assuming the 90 days trading horizon Jeil Steel is expected to generate 3.35 times less return on investment than Korea Air. In addition to that, Jeil Steel is 2.03 times more volatile than Korea Air Svc. It trades about 0.01 of its total potential returns per unit of risk. Korea Air Svc is currently generating about 0.04 per unit of volatility. If you would invest  4,082,579  in Korea Air Svc on October 4, 2024 and sell it today you would earn a total of  1,597,421  from holding Korea Air Svc or generate 39.13% return on investment over 90 days.

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

Jeil Steel Mfg  vs.  Korea Air Svc

Jeil Steel Mfg

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jeil Steel Mfg are ranked lower than 7 (%) 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.

Korea Air Svc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Korea Air Svc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Korea Air may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jeil Steel and Korea Air

The main advantage of trading using opposite Jeil Steel and Korea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeil Steel position performs unexpectedly, Korea Air 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 Korea Air will offset losses from the drop in Korea Air's long position.

The idea behind Jeil Steel Mfg and Korea Air Svc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.