Correlation Between PJ Electronics and Daeduck Electronics
Can any of the company-specific risk be diversified away by investing in both PJ Electronics and Daeduck Electronics 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 PJ Electronics and Daeduck Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PJ Electronics Co and Daeduck Electronics Co, you can compare the effects of market volatilities on PJ Electronics and Daeduck Electronics 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 PJ Electronics with a short position of Daeduck Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Electronics and Daeduck Electronics.
Diversification Opportunities for PJ Electronics and Daeduck Electronics
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 006140 and Daeduck is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding PJ Electronics Co and Daeduck Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daeduck Electronics and PJ Electronics 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 PJ Electronics Co are associated (or correlated) with Daeduck Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daeduck Electronics has no effect on the direction of PJ Electronics i.e., PJ Electronics and Daeduck Electronics go up and down completely randomly.
Pair Corralation between PJ Electronics and Daeduck Electronics
Assuming the 90 days trading horizon PJ Electronics Co is expected to under-perform the Daeduck Electronics. In addition to that, PJ Electronics is 2.88 times more volatile than Daeduck Electronics Co. It trades about -0.11 of its total potential returns per unit of risk. Daeduck Electronics Co is currently generating about 0.04 per unit of volatility. If you would invest 647,000 in Daeduck Electronics Co on September 3, 2024 and sell it today you would earn a total of 23,000 from holding Daeduck Electronics Co or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Electronics Co vs. Daeduck Electronics Co
Performance |
| Timeline |
| PJ Electronics |
| Daeduck Electronics |
PJ Electronics and Daeduck Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Electronics and Daeduck Electronics
The main advantage of trading using opposite PJ Electronics and Daeduck Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Electronics position performs unexpectedly, Daeduck Electronics 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 Daeduck Electronics will offset losses from the drop in Daeduck Electronics' long position.| PJ Electronics vs. Daejoo Electronic Materials | PJ Electronics vs. Parksystems Corp | PJ Electronics vs. BH Co | PJ Electronics vs. Partron Co |
| Daeduck Electronics vs. Kukil Metal Co | Daeduck Electronics vs. Display Tech Co | Daeduck Electronics vs. Seoyon Topmetal Co | Daeduck Electronics vs. Formetal 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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