Correlation Between PJ Metal and Korea Electric
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Korea Electric 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 Korea Electric 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 Korea Electric Power, you can compare the effects of market volatilities on PJ Metal and Korea Electric 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 Korea Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Korea Electric.
Diversification Opportunities for PJ Metal and Korea Electric
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 128660 and Korea is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Korea Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electric Power 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 Korea Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electric Power has no effect on the direction of PJ Metal i.e., PJ Metal and Korea Electric go up and down completely randomly.
Pair Corralation between PJ Metal and Korea Electric
Assuming the 90 days trading horizon PJ Metal is expected to generate 2.41 times less return on investment than Korea Electric. In addition to that, PJ Metal is 1.49 times more volatile than Korea Electric Power. It trades about 0.0 of its total potential returns per unit of risk. Korea Electric Power is currently generating about 0.01 per unit of volatility. If you would invest 2,085,000 in Korea Electric Power on November 3, 2024 and sell it today you would earn a total of 20,000 from holding Korea Electric Power or generate 0.96% 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. Korea Electric Power
Performance |
| Timeline |
| PJ Metal |
| Korea Electric Power |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PJ Metal and Korea Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Korea Electric
The main advantage of trading using opposite PJ Metal and Korea Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Korea Electric 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 Korea Electric will offset losses from the drop in Korea Electric's long position.| PJ Metal vs. Seah Steel Corp | PJ Metal vs. Insun Environment New | PJ Metal vs. Daechang Steel Co | PJ Metal vs. SKONEC Entertainment Co |
| Korea Electric vs. KT Submarine Telecom | Korea Electric vs. WONIK Materials CoLtd | Korea Electric vs. National Plastic Co | Korea Electric vs. Miwon Chemicals 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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