Correlation Between Sung Bo and PJ Metal
Can any of the company-specific risk be diversified away by investing in both Sung Bo and PJ Metal 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 Sung Bo and PJ Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sung Bo Chemicals and PJ Metal Co, you can compare the effects of market volatilities on Sung Bo and PJ Metal 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 Sung Bo with a short position of PJ Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and PJ Metal.
Diversification Opportunities for Sung Bo and PJ Metal
Poor diversification
The 3 months correlation between Sung and 128660 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and PJ Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Metal and Sung Bo 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 Sung Bo Chemicals are associated (or correlated) with PJ Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJ Metal has no effect on the direction of Sung Bo i.e., Sung Bo and PJ Metal go up and down completely randomly.
Pair Corralation between Sung Bo and PJ Metal
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to generate 1.77 times more return on investment than PJ Metal. However, Sung Bo is 1.77 times more volatile than PJ Metal Co. It trades about 0.03 of its potential returns per unit of risk. PJ Metal Co is currently generating about -0.12 per unit of risk. If you would invest 249,000 in Sung Bo Chemicals on November 3, 2024 and sell it today you would earn a total of 1,000.00 from holding Sung Bo Chemicals or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. PJ Metal Co
Performance |
| Timeline |
| Sung Bo Chemicals |
| PJ Metal |
Sung Bo and PJ Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and PJ Metal
The main advantage of trading using opposite Sung Bo and PJ Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, PJ Metal 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 PJ Metal will offset losses from the drop in PJ Metal's long position.| Sung Bo vs. Duksan Hi Metal | Sung Bo vs. CG Hi Tech | Sung Bo vs. Lotte Data Communication | Sung Bo vs. Hanjoo Light Metal |
| PJ Metal vs. Seah Steel Corp | PJ Metal vs. Insun Environment New | PJ Metal vs. Daechang Steel Co | PJ Metal vs. SKONEC Entertainment Co |
Check out your portfolio center.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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