Correlation Between PJ Metal and Samji Electronics
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Samji Electronics 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 Samji Electronics 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 Samji Electronics Co, you can compare the effects of market volatilities on PJ Metal and Samji Electronics 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 Samji Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Samji Electronics.
Diversification Opportunities for PJ Metal and Samji Electronics
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 128660 and Samji is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Samji Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samji Electronics 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 Samji Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samji Electronics has no effect on the direction of PJ Metal i.e., PJ Metal and Samji Electronics go up and down completely randomly.
Pair Corralation between PJ Metal and Samji Electronics
Assuming the 90 days trading horizon PJ Metal Co is expected to under-perform the Samji Electronics. In addition to that, PJ Metal is 2.3 times more volatile than Samji Electronics Co. It trades about -0.07 of its total potential returns per unit of risk. Samji Electronics Co is currently generating about -0.02 per unit of volatility. If you would invest 878,000 in Samji Electronics Co on September 3, 2024 and sell it today you would lose (40,000) from holding Samji Electronics Co or give up 4.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Metal Co vs. Samji Electronics Co
Performance |
| Timeline |
| PJ Metal |
| Samji Electronics |
PJ Metal and Samji Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Samji Electronics
The main advantage of trading using opposite PJ Metal and Samji Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Samji Electronics 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 Samji Electronics will offset losses from the drop in Samji Electronics' 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 |
| Samji Electronics vs. Dongsin Engineering Construction | Samji Electronics vs. Doosan Fuel Cell | Samji Electronics vs. Daishin Balance 1 | Samji Electronics vs. Total Soft Bank |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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