Correlation Between PJ Metal and Korea Information
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Korea Information 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 Information 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 Information Communications, you can compare the effects of market volatilities on PJ Metal and Korea Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Korea Information.
Diversification Opportunities for PJ Metal and Korea Information
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 128660 and Korea is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of PJ Metal i.e., PJ Metal and Korea Information go up and down completely randomly.
Pair Corralation between PJ Metal and Korea Information
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 3.29 times more return on investment than Korea Information. However, PJ Metal is 3.29 times more volatile than Korea Information Communications. It trades about 0.01 of its potential returns per unit of risk. Korea Information Communications is currently generating about -0.04 per unit of risk. If you would invest 312,000 in PJ Metal Co on August 29, 2024 and sell it today you would lose (5,000) from holding PJ Metal Co or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Metal Co vs. Korea Information Communicatio
Performance |
| Timeline |
| PJ Metal |
| Korea Information |
PJ Metal and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Korea Information
The main advantage of trading using opposite PJ Metal and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's long position.| PJ Metal vs. Keum Kang Steel | PJ Metal vs. Samhyun Steel Co | PJ Metal vs. Gyeongnam Steel Co | PJ Metal vs. Jeil Steel Mfg |
| Korea Information vs. Daejung Chemicals Metals | Korea Information vs. KyungIn Electronics Co | Korea Information vs. PJ Metal Co | Korea Information vs. Dongwon Metal 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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