Correlation Between PJ Metal and LG Electronics
Can any of the company-specific risk be diversified away by investing in both PJ Metal and LG 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 LG 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 LG Electronics Pfd, you can compare the effects of market volatilities on PJ Metal and LG 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 LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and LG Electronics.
Diversification Opportunities for PJ Metal and LG Electronics
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 128660 and 066575 is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and LG Electronics Pfd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics Pfd 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 LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics Pfd has no effect on the direction of PJ Metal i.e., PJ Metal and LG Electronics go up and down completely randomly.
Pair Corralation between PJ Metal and LG Electronics
Assuming the 90 days trading horizon PJ Metal Co is expected to under-perform the LG Electronics. In addition to that, PJ Metal is 1.17 times more volatile than LG Electronics Pfd. It trades about -0.16 of its total potential returns per unit of risk. LG Electronics Pfd is currently generating about -0.13 per unit of volatility. If you would invest 4,700,000 in LG Electronics Pfd on August 27, 2024 and sell it today you would lose (195,000) from holding LG Electronics Pfd or give up 4.15% 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. LG Electronics Pfd
Performance |
| Timeline |
| PJ Metal |
| LG Electronics Pfd |
PJ Metal and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and LG Electronics
The main advantage of trading using opposite PJ Metal and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, LG 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 LG Electronics will offset losses from the drop in LG Electronics' long position.| PJ Metal vs. iNtRON Biotechnology | PJ Metal vs. Lotte Chilsung Beverage | PJ Metal vs. Aprogen Healthcare Games | PJ Metal vs. Chorokbaem Healthcare Co |
| LG Electronics vs. AptaBio Therapeutics | LG Electronics vs. Daewoo SBI SPAC | LG Electronics vs. Dream Security co | LG Electronics vs. Microfriend |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |