Correlation Between PJ Metal and GS Retail
Can any of the company-specific risk be diversified away by investing in both PJ Metal and GS Retail 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 Retail 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 Retail Co, you can compare the effects of market volatilities on PJ Metal and GS Retail 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 Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and GS Retail.
Diversification Opportunities for PJ Metal and GS Retail
Very good diversification
The 3 months correlation between 128660 and 007070 is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail 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 Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of PJ Metal i.e., PJ Metal and GS Retail go up and down completely randomly.
Pair Corralation between PJ Metal and GS Retail
Assuming the 90 days trading horizon PJ Metal Co is expected to under-perform the GS Retail. But the stock apears to be less risky and, when comparing its historical volatility, PJ Metal Co is 1.27 times less risky than GS Retail. The stock trades about -0.17 of its potential returns per unit of risk. The GS Retail Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,110,000 in GS Retail Co on August 25, 2024 and sell it today you would earn a total of 150,000 from holding GS Retail Co or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Metal Co vs. GS Retail Co
Performance |
| Timeline |
| PJ Metal |
| GS Retail |
PJ Metal and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and GS Retail
The main advantage of trading using opposite PJ Metal and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, GS Retail 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 Retail will offset losses from the drop in GS Retail's long position.| PJ Metal vs. Hanwha InvestmentSecurities Co | PJ Metal vs. Eagle Veterinary Technology | PJ Metal vs. Global Standard Technology | PJ Metal vs. DSC Investment |
| GS Retail vs. AptaBio Therapeutics | GS Retail vs. Daewoo SBI SPAC | GS Retail vs. Dream Security co | GS Retail vs. Microfriend |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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