Correlation Between Ssangyong Materials and PJ Electronics
Can any of the company-specific risk be diversified away by investing in both Ssangyong Materials 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 Ssangyong Materials and PJ Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ssangyong Materials Corp and PJ Electronics Co, you can compare the effects of market volatilities on Ssangyong Materials 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 Ssangyong Materials with a short position of PJ Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Materials and PJ Electronics.
Diversification Opportunities for Ssangyong Materials and PJ Electronics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ssangyong and 006140 is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Materials Corp and PJ Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Electronics and Ssangyong Materials 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 Ssangyong Materials Corp 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 Ssangyong Materials i.e., Ssangyong Materials and PJ Electronics go up and down completely randomly.
Pair Corralation between Ssangyong Materials and PJ Electronics
Assuming the 90 days trading horizon Ssangyong Materials Corp is expected to under-perform the PJ Electronics. In addition to that, Ssangyong Materials is 1.24 times more volatile than PJ Electronics Co. It trades about -0.02 of its total potential returns per unit of risk. PJ Electronics Co is currently generating about 0.19 per unit of volatility. If you would invest 437,684 in PJ Electronics Co on October 26, 2024 and sell it today you would earn a total of 86,316 from holding PJ Electronics Co or generate 19.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ssangyong Materials Corp vs. PJ Electronics Co
Performance |
| Timeline |
| Ssangyong Materials Corp |
| PJ Electronics |
Ssangyong Materials and PJ Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ssangyong Materials and PJ Electronics
The main advantage of trading using opposite Ssangyong Materials and PJ Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Materials 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.| Ssangyong Materials vs. KB Financial Group | Ssangyong Materials vs. Shinhan Financial Group | Ssangyong Materials vs. Hana Financial | Ssangyong Materials vs. Woori Financial Group |
| PJ Electronics vs. Ssangyong Materials Corp | PJ Electronics vs. DONGKUK TED METAL | PJ Electronics vs. PJ Metal Co | PJ Electronics vs. PI Advanced Materials |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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