Correlation Between PJ Electronics and Korea Zinc
Can any of the company-specific risk be diversified away by investing in both PJ Electronics and Korea Zinc 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 Korea Zinc 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 Korea Zinc, you can compare the effects of market volatilities on PJ Electronics and Korea Zinc 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 Korea Zinc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Electronics and Korea Zinc.
Diversification Opportunities for PJ Electronics and Korea Zinc
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 006140 and Korea is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PJ Electronics Co and Korea Zinc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Zinc 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 Korea Zinc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Zinc has no effect on the direction of PJ Electronics i.e., PJ Electronics and Korea Zinc go up and down completely randomly.
Pair Corralation between PJ Electronics and Korea Zinc
Assuming the 90 days trading horizon PJ Electronics Co is expected to under-perform the Korea Zinc. In addition to that, PJ Electronics is 1.32 times more volatile than Korea Zinc. It trades about 0.0 of its total potential returns per unit of risk. Korea Zinc is currently generating about 0.06 per unit of volatility. If you would invest 55,777,400 in Korea Zinc on September 3, 2024 and sell it today you would earn a total of 44,222,600 from holding Korea Zinc or generate 79.28% 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. Korea Zinc
Performance |
| Timeline |
| PJ Electronics |
| Korea Zinc |
PJ Electronics and Korea Zinc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Electronics and Korea Zinc
The main advantage of trading using opposite PJ Electronics and Korea Zinc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Electronics position performs unexpectedly, Korea Zinc 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 Korea Zinc will offset losses from the drop in Korea Zinc's long position.| PJ Electronics vs. Daejoo Electronic Materials | PJ Electronics vs. Parksystems Corp | PJ Electronics vs. BH Co | PJ Electronics vs. Partron Co |
| Korea Zinc vs. Dongbu Steel Co | Korea Zinc vs. Heungkuk Metaltech CoLtd | Korea Zinc vs. Fine Besteel Co | Korea Zinc vs. Dong A Steel Technology |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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