Correlation Between Jeil Steel and Industrial Bank

Can any of the company-specific risk be diversified away by investing in both Jeil Steel and Industrial Bank 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 Industrial Bank 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 Industrial Bank, you can compare the effects of market volatilities on Jeil Steel and Industrial Bank 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 Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeil Steel and Industrial Bank.

Diversification Opportunities for Jeil Steel and Industrial Bank

0.54

Correlation Coefficient

Jeil Steel  Industrial Bank

Very weak diversification

The 3 months correlation between Jeil and Industrial is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and Industrial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank 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 Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of Jeil Steel i.e., Jeil Steel and Industrial Bank go up and down completely randomly.

Pair Corralation between Jeil Steel and Industrial Bank

Assuming the 90 days trading horizon Jeil Steel Mfg is expected to generate 4.19 times more return on investment than Industrial Bank. However, Jeil Steel is 4.19 times more volatile than Industrial Bank. It trades about 0.05 of its potential returns per unit of risk. Industrial Bank is currently generating about 0.15 per unit of risk. If you would invest  173,900  in Jeil Steel Mfg on December 24, 2024 and sell it today you would earn a total of  10,100  from holding Jeil Steel Mfg or generate 5.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.28%
Values	Daily Returns

Jeil Steel Mfg  vs.  Industrial Bank

Jeil Steel Mfg

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jeil Steel Mfg are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jeil Steel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Industrial Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Industrial Bank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Industrial Bank may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Jeil Steel and Industrial Bank

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

The idea behind Jeil Steel Mfg and Industrial Bank 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 CEOs Directory module to screen CEOs from public companies around the world.