Correlation Between J Steel and Actoz Soft

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

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

Diversification Opportunities for J Steel and Actoz Soft

0.02

Correlation Coefficient

J Steel  Actoz Soft

Significant diversification

The 3 months correlation between 023440 and Actoz is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and Actoz Soft CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actoz Soft CoLtd and J 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 J Steel Co are associated (or correlated) with Actoz Soft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actoz Soft CoLtd has no effect on the direction of J Steel i.e., J Steel and Actoz Soft go up and down completely randomly.

Pair Corralation between J Steel and Actoz Soft

Assuming the 90 days trading horizon J Steel Co is expected to under-perform the Actoz Soft. In addition to that, J Steel is 1.14 times more volatile than Actoz Soft CoLtd. It trades about -0.04 of its total potential returns per unit of risk. Actoz Soft CoLtd is currently generating about 0.02 per unit of volatility. If you would invest  692,000  in Actoz Soft CoLtd on September 28, 2024 and sell it today you would lose (1,000.00) from holding Actoz Soft CoLtd or give up 0.14% of portfolio value over 90 days.

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

J Steel Co  vs.  Actoz Soft CoLtd

J Steel

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in J Steel Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, J Steel sustained solid returns over the last few months and may actually be approaching a breakup point.

Actoz Soft CoLtd

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Actoz Soft CoLtd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Actoz Soft sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with J Steel and Actoz Soft

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

The idea behind J Steel Co and Actoz Soft CoLtd 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.