Correlation Between PJ Metal and Jeju Semiconductor
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Jeju Semiconductor 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 Jeju Semiconductor 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 Jeju Semiconductor Corp, you can compare the effects of market volatilities on PJ Metal and Jeju Semiconductor 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 Jeju Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Jeju Semiconductor.
Diversification Opportunities for PJ Metal and Jeju Semiconductor
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 128660 and Jeju is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor Corp 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 Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of PJ Metal i.e., PJ Metal and Jeju Semiconductor go up and down completely randomly.
Pair Corralation between PJ Metal and Jeju Semiconductor
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 1.06 times more return on investment than Jeju Semiconductor. However, PJ Metal is 1.06 times more volatile than Jeju Semiconductor Corp. It trades about 0.0 of its potential returns per unit of risk. Jeju Semiconductor Corp is currently generating about -0.16 per unit of risk. If you would invest 317,000 in PJ Metal Co on August 25, 2024 and sell it today you would lose (10,000) from holding PJ Metal Co or give up 3.15% 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. Jeju Semiconductor Corp
Performance |
| Timeline |
| PJ Metal |
| Jeju Semiconductor Corp |
PJ Metal and Jeju Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Jeju Semiconductor
The main advantage of trading using opposite PJ Metal and Jeju Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Jeju Semiconductor 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 Jeju Semiconductor will offset losses from the drop in Jeju Semiconductor's long position.| PJ Metal vs. INNOX Advanced Materials | PJ Metal vs. Seoul Semiconductor Co | PJ Metal vs. Samhwa Paint Industrial | PJ Metal vs. MetaLabs Co |
| Jeju Semiconductor vs. Korea Real Estate | Jeju Semiconductor vs. Korea Ratings Co | Jeju Semiconductor vs. IQuest Co | Jeju Semiconductor vs. Wonbang Tech Co |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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