Correlation Between BIT Computer and PJ Electronics
Can any of the company-specific risk be diversified away by investing in both BIT Computer and PJ Electronics 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 BIT Computer and PJ Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIT Computer Co and PJ Electronics Co, you can compare the effects of market volatilities on BIT Computer and PJ Electronics 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 BIT Computer with a short position of PJ Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIT Computer and PJ Electronics.
Diversification Opportunities for BIT Computer and PJ Electronics
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BIT and 006140 is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding BIT Computer Co and PJ Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Electronics and BIT Computer 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 BIT Computer Co are associated (or correlated) with PJ Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJ Electronics has no effect on the direction of BIT Computer i.e., BIT Computer and PJ Electronics go up and down completely randomly.
Pair Corralation between BIT Computer and PJ Electronics
Assuming the 90 days trading horizon BIT Computer Co is expected to generate 1.16 times more return on investment than PJ Electronics. However, BIT Computer is 1.16 times more volatile than PJ Electronics Co. It trades about -0.01 of its potential returns per unit of risk. PJ Electronics Co is currently generating about -0.02 per unit of risk. If you would invest 718,950 in BIT Computer Co on October 27, 2024 and sell it today you would lose (229,950) from holding BIT Computer Co or give up 31.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIT Computer Co vs. PJ Electronics Co
Performance |
| Timeline |
| BIT Computer |
| PJ Electronics |
BIT Computer and PJ Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIT Computer and PJ Electronics
The main advantage of trading using opposite BIT Computer and PJ Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIT Computer position performs unexpectedly, PJ Electronics 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 PJ Electronics will offset losses from the drop in PJ Electronics' long position.| BIT Computer vs. SV Investment | BIT Computer vs. LB Investment | BIT Computer vs. Solus Advanced Materials | BIT Computer vs. NH Investment Securities |
| PJ Electronics vs. Lotte Data Communication | PJ Electronics vs. SCI Information Service | PJ Electronics vs. InnoTherapy | PJ Electronics vs. Ecoplastic |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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