Correlation Between Jeil Steel and Synopex

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

Diversification Opportunities for Jeil Steel and Synopex

-0.5

Correlation Coefficient

Jeil Steel  Synopex

Very good diversification

The 3 months correlation between Jeil and Synopex is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and Synopex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synopex 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 Synopex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synopex has no effect on the direction of Jeil Steel i.e., Jeil Steel and Synopex go up and down completely randomly.

Pair Corralation between Jeil Steel and Synopex

Assuming the 90 days trading horizon Jeil Steel Mfg is expected to under-perform the Synopex. But the stock apears to be less risky and, when comparing its historical volatility, Jeil Steel Mfg is 1.01 times less risky than Synopex. The stock trades about -0.09 of its potential returns per unit of risk. The Synopex is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  623,809  in Synopex on September 29, 2024 and sell it today you would lose (12,809) from holding Synopex or give up 2.05% of portfolio value over 90 days.

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

Jeil Steel Mfg  vs.  Synopex

Jeil Steel Mfg

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jeil Steel Mfg are ranked lower than 6 (%) 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.

Synopex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synopex has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Jeil Steel and Synopex

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

The idea behind Jeil Steel Mfg and Synopex 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.