Correlation Between Settlebank and Jeil Steel

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

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

Diversification Opportunities for Settlebank and Jeil Steel

-0.62

Correlation Coefficient

Settlebank  Jeil Steel

Excellent diversification

The 3 months correlation between Settlebank and Jeil is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Settlebank 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 Settlebank 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 Settlebank 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 Settlebank i.e., Settlebank and Jeil Steel go up and down completely randomly.

Pair Corralation between Settlebank and Jeil Steel

Assuming the 90 days trading horizon Settlebank is expected to generate 0.74 times more return on investment than Jeil Steel. However, Settlebank is 1.35 times less risky than Jeil Steel. It trades about 0.0 of its potential returns per unit of risk. Jeil Steel Mfg is currently generating about -0.02 per unit of risk. If you would invest  1,604,093  in Settlebank on September 12, 2024 and sell it today you would lose (277,093) from holding Settlebank or give up 17.27% of portfolio value over 90 days.

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

Settlebank  vs.  Jeil Steel Mfg

Settlebank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Settlebank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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 Settlebank and Jeil Steel

The main advantage of trading using opposite Settlebank and Jeil Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Settlebank 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 Settlebank 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.