Correlation Between PJ Metal and UNISEM
Can any of the company-specific risk be diversified away by investing in both PJ Metal and UNISEM 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 UNISEM 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 UNISEM Co, you can compare the effects of market volatilities on PJ Metal and UNISEM 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 UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and UNISEM.
Diversification Opportunities for PJ Metal and UNISEM
Poor diversification
The 3 months correlation between 128660 and UNISEM is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM 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 UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of PJ Metal i.e., PJ Metal and UNISEM go up and down completely randomly.
Pair Corralation between PJ Metal and UNISEM
Assuming the 90 days trading horizon PJ Metal is expected to generate 1.62 times less return on investment than UNISEM. But when comparing it to its historical volatility, PJ Metal Co is 1.12 times less risky than UNISEM. It trades about 0.01 of its potential returns per unit of risk. UNISEM Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 608,055 in UNISEM Co on September 3, 2024 and sell it today you would lose (16,055) from holding UNISEM Co or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Metal Co vs. UNISEM Co
Performance |
| Timeline |
| PJ Metal |
| UNISEM |
PJ Metal and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and UNISEM
The main advantage of trading using opposite PJ Metal and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's 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 |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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