Correlation Between PJ Metal and Youngbo Chemical
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Youngbo Chemical 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 Youngbo Chemical 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 Youngbo Chemical Co, you can compare the effects of market volatilities on PJ Metal and Youngbo Chemical 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 Youngbo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Youngbo Chemical.
Diversification Opportunities for PJ Metal and Youngbo Chemical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 128660 and Youngbo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Youngbo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngbo Chemical 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 Youngbo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngbo Chemical has no effect on the direction of PJ Metal i.e., PJ Metal and Youngbo Chemical go up and down completely randomly.
Pair Corralation between PJ Metal and Youngbo Chemical
Assuming the 90 days trading horizon PJ Metal Co is expected to under-perform the Youngbo Chemical. But the stock apears to be less risky and, when comparing its historical volatility, PJ Metal Co is 3.68 times less risky than Youngbo Chemical. The stock trades about -0.04 of its potential returns per unit of risk. The Youngbo Chemical Co is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 356,000 in Youngbo Chemical Co on October 30, 2024 and sell it today you would earn a total of 37,000 from holding Youngbo Chemical Co or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Metal Co vs. Youngbo Chemical Co
Performance |
| Timeline |
| PJ Metal |
| Youngbo Chemical |
PJ Metal and Youngbo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Youngbo Chemical
The main advantage of trading using opposite PJ Metal and Youngbo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Youngbo Chemical 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 Youngbo Chemical will offset losses from the drop in Youngbo Chemical's long position.| PJ Metal vs. Nable Communications | PJ Metal vs. Cloud Air CoLtd | PJ Metal vs. Daishin Information Communications | PJ Metal vs. Korea Air Svc |
| Youngbo Chemical vs. KB Financial Group | Youngbo Chemical vs. Shinhan Financial Group | Youngbo Chemical vs. Hana Financial | Youngbo Chemical vs. Woori Financial Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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