Correlation Between PJ Metal and Jinro Distillers
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Jinro Distillers 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 Jinro Distillers 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 Jinro Distillers Co, you can compare the effects of market volatilities on PJ Metal and Jinro Distillers 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 Jinro Distillers. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Jinro Distillers.
Diversification Opportunities for PJ Metal and Jinro Distillers
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between 128660 and Jinro is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Jinro Distillers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinro Distillers 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 Jinro Distillers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinro Distillers has no effect on the direction of PJ Metal i.e., PJ Metal and Jinro Distillers go up and down completely randomly.
Pair Corralation between PJ Metal and Jinro Distillers
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 3.19 times more return on investment than Jinro Distillers. However, PJ Metal is 3.19 times more volatile than Jinro Distillers Co. It trades about 0.01 of its potential returns per unit of risk. Jinro Distillers Co is currently generating about -0.04 per unit of risk. If you would invest 320,098 in PJ Metal Co on September 3, 2024 and sell it today you would lose (19,098) from holding PJ Metal Co or give up 5.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Metal Co vs. Jinro Distillers Co
Performance |
| Timeline |
| PJ Metal |
| Jinro Distillers |
PJ Metal and Jinro Distillers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Jinro Distillers
The main advantage of trading using opposite PJ Metal and Jinro Distillers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Jinro Distillers 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 Jinro Distillers will offset losses from the drop in Jinro Distillers' long position.| PJ Metal vs. Keum Kang Steel | PJ Metal vs. Tplex Co | PJ Metal vs. Gyeongnam Steel Co | PJ Metal vs. Jeil Steel Mfg |
| Jinro Distillers vs. LG Display | Jinro Distillers vs. Hyundai Motor | Jinro Distillers vs. Hyundai Motor Co | Jinro Distillers vs. Hyundai Motor 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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