Correlation Between PJ Electronics and Interflex
Can any of the company-specific risk be diversified away by investing in both PJ Electronics and Interflex 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 Interflex 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 Interflex Co, you can compare the effects of market volatilities on PJ Electronics and Interflex 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 Interflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Electronics and Interflex.
Diversification Opportunities for PJ Electronics and Interflex
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 006140 and Interflex is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding PJ Electronics Co and Interflex Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interflex 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 Interflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interflex has no effect on the direction of PJ Electronics i.e., PJ Electronics and Interflex go up and down completely randomly.
Pair Corralation between PJ Electronics and Interflex
Assuming the 90 days trading horizon PJ Electronics Co is expected to under-perform the Interflex. But the stock apears to be less risky and, when comparing its historical volatility, PJ Electronics Co is 1.08 times less risky than Interflex. The stock trades about -0.01 of its potential returns per unit of risk. The Interflex Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 986,000 in Interflex Co on September 12, 2024 and sell it today you would lose (169,000) from holding Interflex Co or give up 17.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Electronics Co vs. Interflex Co
Performance |
| Timeline |
| PJ Electronics |
| Interflex |
PJ Electronics and Interflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Electronics and Interflex
The main advantage of trading using opposite PJ Electronics and Interflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Electronics position performs unexpectedly, Interflex 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 Interflex will offset losses from the drop in Interflex's long position.| PJ Electronics vs. Daejoo Electronic Materials | PJ Electronics vs. Interflex Co | PJ Electronics vs. Solution Advanced Technology | PJ Electronics vs. Busan Industrial Co |
| Interflex vs. Cube Entertainment | Interflex vs. Dreamus Company | Interflex vs. LG Energy Solution | Interflex vs. Dongwon System |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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