Correlation Between Jeju Semiconductor and PJ Metal
Can any of the company-specific risk be diversified away by investing in both Jeju Semiconductor and PJ Metal 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 Jeju Semiconductor and PJ Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Semiconductor Corp and PJ Metal Co, you can compare the effects of market volatilities on Jeju Semiconductor and PJ Metal 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 Jeju Semiconductor with a short position of PJ Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Semiconductor and PJ Metal.
Diversification Opportunities for Jeju Semiconductor and PJ Metal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jeju and 128660 is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Semiconductor Corp and PJ Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Metal and Jeju Semiconductor 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 Jeju Semiconductor Corp are associated (or correlated) with PJ Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJ Metal has no effect on the direction of Jeju Semiconductor i.e., Jeju Semiconductor and PJ Metal go up and down completely randomly.
Pair Corralation between Jeju Semiconductor and PJ Metal
Assuming the 90 days trading horizon Jeju Semiconductor Corp is expected to generate 1.46 times more return on investment than PJ Metal. However, Jeju Semiconductor is 1.46 times more volatile than PJ Metal Co. It trades about 0.06 of its potential returns per unit of risk. PJ Metal Co is currently generating about 0.01 per unit of risk. If you would invest 387,500 in Jeju Semiconductor Corp on August 25, 2024 and sell it today you would earn a total of 563,500 from holding Jeju Semiconductor Corp or generate 145.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Semiconductor Corp vs. PJ Metal Co
Performance |
| Timeline |
| Jeju Semiconductor Corp |
| PJ Metal |
Jeju Semiconductor and PJ Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Semiconductor and PJ Metal
The main advantage of trading using opposite Jeju Semiconductor and PJ Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Semiconductor position performs unexpectedly, PJ Metal 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 Metal will offset losses from the drop in PJ Metal's long position.| Jeju Semiconductor vs. Korea Real Estate | Jeju Semiconductor vs. Korea Ratings Co | Jeju Semiconductor vs. IQuest Co | Jeju Semiconductor vs. Wonbang Tech Co |
| PJ Metal vs. INNOX Advanced Materials | PJ Metal vs. Seoul Semiconductor Co | PJ Metal vs. Samhwa Paint Industrial | PJ Metal vs. MetaLabs 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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