Correlation Between PJ Metal and Daeduck Electronics
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Daeduck 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 PJ Metal and Daeduck Electronics 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 Daeduck Electronics Co, you can compare the effects of market volatilities on PJ Metal and Daeduck 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 PJ Metal with a short position of Daeduck Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Daeduck Electronics.
Diversification Opportunities for PJ Metal and Daeduck Electronics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 128660 and Daeduck is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Daeduck Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daeduck Electronics 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 Daeduck Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daeduck Electronics has no effect on the direction of PJ Metal i.e., PJ Metal and Daeduck Electronics go up and down completely randomly.
Pair Corralation between PJ Metal and Daeduck Electronics
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 0.94 times more return on investment than Daeduck Electronics. However, PJ Metal Co is 1.07 times less risky than Daeduck Electronics. It trades about 0.16 of its potential returns per unit of risk. Daeduck Electronics Co is currently generating about 0.14 per unit of risk. If you would invest 295,000 in PJ Metal Co on October 27, 2024 and sell it today you would earn a total of 5,500 from holding PJ Metal Co or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Metal Co vs. Daeduck Electronics Co
Performance |
| Timeline |
| PJ Metal |
| Daeduck Electronics |
PJ Metal and Daeduck Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Daeduck Electronics
The main advantage of trading using opposite PJ Metal and Daeduck Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Daeduck 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 Daeduck Electronics will offset losses from the drop in Daeduck Electronics' long position.| PJ Metal vs. Lotte Data Communication | PJ Metal vs. Duksan Hi Metal | PJ Metal vs. Mobile Appliance | PJ Metal vs. Nice Information Telecommunication |
| Daeduck Electronics vs. DONGKUK STEEL MILL | Daeduck Electronics vs. Nature and Environment | Daeduck Electronics vs. Daesung Hi Tech Co | Daeduck Electronics vs. LG Display 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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