Correlation Between PJ Metal and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Duksan Hi 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 Duksan Hi 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 Duksan Hi Metal, you can compare the effects of market volatilities on PJ Metal and Duksan Hi 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 Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Duksan Hi.
Diversification Opportunities for PJ Metal and Duksan Hi
Weak diversification
The 3 months correlation between 128660 and Duksan is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Duksan Hi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duksan Hi Metal 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 Duksan Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duksan Hi Metal has no effect on the direction of PJ Metal i.e., PJ Metal and Duksan Hi go up and down completely randomly.
Pair Corralation between PJ Metal and Duksan Hi
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 0.61 times more return on investment than Duksan Hi. However, PJ Metal Co is 1.63 times less risky than Duksan Hi. It trades about -0.19 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.36 per unit of risk. If you would invest 330,000 in PJ Metal Co on August 24, 2024 and sell it today you would lose (24,000) from holding PJ Metal Co or give up 7.27% 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. Duksan Hi Metal
Performance |
| Timeline |
| PJ Metal |
| Duksan Hi Metal |
PJ Metal and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Duksan Hi
The main advantage of trading using opposite PJ Metal and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Duksan Hi 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 Duksan Hi will offset losses from the drop in Duksan Hi's long position.| PJ Metal vs. Hanwha InvestmentSecurities Co | PJ Metal vs. Eagle Veterinary Technology | PJ Metal vs. Global Standard Technology | PJ Metal vs. DSC Investment |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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