Correlation Between Phoenix Materials and PJ Electronics
Can any of the company-specific risk be diversified away by investing in both Phoenix 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 Phoenix 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 Phoenix Materials Co and PJ Electronics Co, you can compare the effects of market volatilities on Phoenix 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 Phoenix Materials with a short position of PJ Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Materials and PJ Electronics.
Diversification Opportunities for Phoenix Materials and PJ Electronics
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Phoenix and 006140 is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Materials 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 Phoenix 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 Phoenix Materials 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 Phoenix Materials i.e., Phoenix Materials and PJ Electronics go up and down completely randomly.
Pair Corralation between Phoenix Materials and PJ Electronics
Assuming the 90 days trading horizon Phoenix Materials is expected to generate 2.17 times less return on investment than PJ Electronics. In addition to that, Phoenix Materials is 1.89 times more volatile than PJ Electronics Co. It trades about 0.07 of its total potential returns per unit of risk. PJ Electronics Co is currently generating about 0.29 per unit of volatility. If you would invest 431,842 in PJ Electronics Co on October 17, 2024 and sell it today you would earn a total of 46,658 from holding PJ Electronics Co or generate 10.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Phoenix Materials Co vs. PJ Electronics Co
Performance |
| Timeline |
| Phoenix Materials |
| PJ Electronics |
Phoenix Materials and PJ Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix Materials and PJ Electronics
The main advantage of trading using opposite Phoenix Materials and PJ Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix 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.| Phoenix Materials vs. Myoung Shin Industrial | Phoenix Materials vs. PJ Metal Co | Phoenix Materials vs. LEENO Industrial | Phoenix Materials vs. Daesung Industrial Co |
| PJ Electronics vs. Hana Materials | PJ Electronics vs. TS Investment Corp | PJ Electronics vs. Phoenix Materials Co | PJ Electronics vs. KTB Investment Securities |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
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| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |