Correlation Between Stic Investments and J Steel

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

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

Diversification Opportunities for Stic Investments and J Steel

-0.04

Correlation Coefficient

Stic Investments  J Steel

Good diversification

The 3 months correlation between Stic and 023440 is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Stic Investments and J Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Steel and Stic Investments 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 Stic Investments are associated (or correlated) with J Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Steel has no effect on the direction of Stic Investments i.e., Stic Investments and J Steel go up and down completely randomly.

Pair Corralation between Stic Investments and J Steel

Assuming the 90 days trading horizon Stic Investments is expected to generate 0.51 times more return on investment than J Steel. However, Stic Investments is 1.94 times less risky than J Steel. It trades about 0.03 of its potential returns per unit of risk. J Steel Co is currently generating about -0.03 per unit of risk. If you would invest  828,000  in Stic Investments on November 29, 2024 and sell it today you would earn a total of  15,000  from holding Stic Investments or generate 1.81% return on investment over 90 days.

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

Stic Investments  vs.  J Steel Co

Stic Investments

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stic Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Stic Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

J Steel

Risk-Adjusted Performance

Very Weak

Over the last 90 days J Steel Co 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 Stic Investments and J Steel

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

The idea behind Stic Investments and J Steel Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.