Correlation Between PJ Metal and Aurora World
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Aurora World 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 Aurora World 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 Aurora World, you can compare the effects of market volatilities on PJ Metal and Aurora World 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 Aurora World. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Aurora World.
Diversification Opportunities for PJ Metal and Aurora World
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between 128660 and Aurora is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Aurora World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora World 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 Aurora World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora World has no effect on the direction of PJ Metal i.e., PJ Metal and Aurora World go up and down completely randomly.
Pair Corralation between PJ Metal and Aurora World
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 2.3 times more return on investment than Aurora World. However, PJ Metal is 2.3 times more volatile than Aurora World. It trades about 0.01 of its potential returns per unit of risk. Aurora World is currently generating about -0.03 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Metal Co vs. Aurora World
Performance |
| Timeline |
| PJ Metal |
| Aurora World |
PJ Metal and Aurora World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Aurora World
The main advantage of trading using opposite PJ Metal and Aurora World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Aurora World 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 Aurora World will offset losses from the drop in Aurora World'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 |
| Aurora World vs. Korea Real Estate | Aurora World vs. Busan Industrial Co | Aurora World vs. UNISEM Co | Aurora World vs. RPBio Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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