Correlation Between PJ Electronics and Finebesteel
Can any of the company-specific risk be diversified away by investing in both PJ Electronics and Finebesteel 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 Finebesteel 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 Finebesteel, you can compare the effects of market volatilities on PJ Electronics and Finebesteel 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 Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Electronics and Finebesteel.
Diversification Opportunities for PJ Electronics and Finebesteel
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 006140 and Finebesteel is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding PJ Electronics Co and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel 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 Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of PJ Electronics i.e., PJ Electronics and Finebesteel go up and down completely randomly.
Pair Corralation between PJ Electronics and Finebesteel
Assuming the 90 days trading horizon PJ Electronics is expected to generate 1.47 times less return on investment than Finebesteel. But when comparing it to its historical volatility, PJ Electronics Co is 1.04 times less risky than Finebesteel. It trades about 0.2 of its potential returns per unit of risk. Finebesteel is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 91,900 in Finebesteel on November 3, 2024 and sell it today you would earn a total of 14,600 from holding Finebesteel or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Electronics Co vs. Finebesteel
Performance |
| Timeline |
| PJ Electronics |
| Finebesteel |
PJ Electronics and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Electronics and Finebesteel
The main advantage of trading using opposite PJ Electronics and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Electronics position performs unexpectedly, Finebesteel 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 Finebesteel will offset losses from the drop in Finebesteel's long position.| PJ Electronics vs. Nable Communications | PJ Electronics vs. Dongbu Insurance Co | PJ Electronics vs. Lotte Data Communication | PJ Electronics vs. KakaoBank Corp |
| Finebesteel vs. SK Telecom Co | Finebesteel vs. Daou Data Corp | Finebesteel vs. SCI Information Service | Finebesteel vs. Inzi Display CoLtd |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |