Correlation Between PJ Electronics and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both PJ Electronics and Hyundai Home 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 Hyundai Home 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 Hyundai Home Shopping, you can compare the effects of market volatilities on PJ Electronics and Hyundai Home 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 Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Electronics and Hyundai Home.
Diversification Opportunities for PJ Electronics and Hyundai Home
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between 006140 and Hyundai is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PJ Electronics Co and Hyundai Home Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Home Shopping 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 Hyundai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Home Shopping has no effect on the direction of PJ Electronics i.e., PJ Electronics and Hyundai Home go up and down completely randomly.
Pair Corralation between PJ Electronics and Hyundai Home
Assuming the 90 days trading horizon PJ Electronics is expected to generate 1.23 times less return on investment than Hyundai Home. In addition to that, PJ Electronics is 1.57 times more volatile than Hyundai Home Shopping. It trades about 0.18 of its total potential returns per unit of risk. Hyundai Home Shopping is currently generating about 0.34 per unit of volatility. If you would invest 4,450,000 in Hyundai Home Shopping on November 7, 2024 and sell it today you would earn a total of 525,000 from holding Hyundai Home Shopping or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
PJ Electronics Co vs. Hyundai Home Shopping
Performance |
| Timeline |
| PJ Electronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Hyundai Home Shopping |
PJ Electronics and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Electronics and Hyundai Home
The main advantage of trading using opposite PJ Electronics and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Electronics position performs unexpectedly, Hyundai Home 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 Hyundai Home will offset losses from the drop in Hyundai Home's long position.| PJ Electronics vs. SAMG Entertainment Co | PJ Electronics vs. PH Tech Co | PJ Electronics vs. SEOWONINTECHCoLtd | PJ Electronics vs. Seoul Electronics Telecom |
| Hyundai Home vs. SK Chemicals Co | Hyundai Home vs. Aekyung Petrochemical Co | Hyundai Home vs. Neungyule Education | Hyundai Home vs. Samsung Life Insurance |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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