Correlation Between PJ Metal and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Kaonmedia 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 Kaonmedia 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 Kaonmedia Co, you can compare the effects of market volatilities on PJ Metal and Kaonmedia 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 Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Kaonmedia.
Diversification Opportunities for PJ Metal and Kaonmedia
Average diversification
The 3 months correlation between 128660 and Kaonmedia is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia 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 Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of PJ Metal i.e., PJ Metal and Kaonmedia go up and down completely randomly.
Pair Corralation between PJ Metal and Kaonmedia
Assuming the 90 days trading horizon PJ Metal Co is expected to under-perform the Kaonmedia. But the stock apears to be less risky and, when comparing its historical volatility, PJ Metal Co is 2.02 times less risky than Kaonmedia. The stock trades about -0.11 of its potential returns per unit of risk. The Kaonmedia Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 352,000 in Kaonmedia Co on August 31, 2024 and sell it today you would lose (6,000) from holding Kaonmedia Co or give up 1.7% 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. Kaonmedia Co
Performance |
| Timeline |
| PJ Metal |
| Kaonmedia |
PJ Metal and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Kaonmedia
The main advantage of trading using opposite PJ Metal and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia'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 |
| Kaonmedia vs. Dongsin Engineering Construction | Kaonmedia vs. Doosan Fuel Cell | Kaonmedia vs. Daishin Balance 1 | Kaonmedia 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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