Correlation Between PJ Metal and GS Engineering
Can any of the company-specific risk be diversified away by investing in both PJ Metal and GS Engineering 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 Metal and GS Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PJ Metal Co and GS Engineering Construction, you can compare the effects of market volatilities on PJ Metal and GS Engineering 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 Metal with a short position of GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and GS Engineering.
Diversification Opportunities for PJ Metal and GS Engineering
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between 128660 and 006360 is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const and PJ Metal 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 Metal Co are associated (or correlated) with GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of PJ Metal i.e., PJ Metal and GS Engineering go up and down completely randomly.
Pair Corralation between PJ Metal and GS Engineering
Assuming the 90 days trading horizon PJ Metal Co is expected to under-perform the GS Engineering. But the stock apears to be less risky and, when comparing its historical volatility, PJ Metal Co is 1.13 times less risky than GS Engineering. The stock trades about -0.17 of its potential returns per unit of risk. The GS Engineering Construction is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,761,000 in GS Engineering Construction on September 12, 2024 and sell it today you would earn a total of 59,000 from holding GS Engineering Construction or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PJ Metal Co vs. GS Engineering Construction
Performance |
| Timeline |
| PJ Metal |
| GS Engineering Const |
PJ Metal and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and GS Engineering
The main advantage of trading using opposite PJ Metal and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| PJ Metal vs. Dongwon Metal Co | PJ Metal vs. DONGKUK TED METAL | PJ Metal vs. BNK Financial Group | PJ Metal vs. KB Financial Group |
| GS Engineering vs. Korea New Network | GS Engineering vs. Solution Advanced Technology | GS Engineering vs. Busan Industrial Co | GS Engineering vs. Busan Ind |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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