Correlation Between PJ Electronics and HB Technology
Can any of the company-specific risk be diversified away by investing in both PJ Electronics and HB Technology 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 HB Technology 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 HB Technology TD, you can compare the effects of market volatilities on PJ Electronics and HB Technology 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 HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Electronics and HB Technology.
Diversification Opportunities for PJ Electronics and HB Technology
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 006140 and 078150 is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding PJ Electronics Co and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD 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 HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of PJ Electronics i.e., PJ Electronics and HB Technology go up and down completely randomly.
Pair Corralation between PJ Electronics and HB Technology
Assuming the 90 days trading horizon PJ Electronics Co is expected to under-perform the HB Technology. But the stock apears to be less risky and, when comparing its historical volatility, PJ Electronics Co is 1.67 times less risky than HB Technology. The stock trades about -0.03 of its potential returns per unit of risk. The HB Technology TD is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 194,842 in HB Technology TD on October 11, 2024 and sell it today you would earn a total of 61,158 from holding HB Technology TD or generate 31.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Electronics Co vs. HB Technology TD
Performance |
| Timeline |
| PJ Electronics |
| HB Technology TD |
PJ Electronics and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Electronics and HB Technology
The main advantage of trading using opposite PJ Electronics and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Electronics position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| PJ Electronics vs. Samsung Publishing Co | PJ Electronics vs. Nice Information Telecommunication | PJ Electronics vs. BIT Computer Co | PJ Electronics vs. Sangsin Energy Display |
| HB Technology vs. Seoyon Topmetal Co | HB Technology vs. PJ Electronics Co | HB Technology vs. Eagon Industrial Co | HB Technology vs. DoubleU Games 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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