Correlation Between PJ Metal and GeneBioTech
Can any of the company-specific risk be diversified away by investing in both PJ Metal and GeneBioTech 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 GeneBioTech 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 GeneBioTech Co, you can compare the effects of market volatilities on PJ Metal and GeneBioTech 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 GeneBioTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and GeneBioTech.
Diversification Opportunities for PJ Metal and GeneBioTech
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 128660 and GeneBioTech is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and GeneBioTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneBioTech 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 GeneBioTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneBioTech has no effect on the direction of PJ Metal i.e., PJ Metal and GeneBioTech go up and down completely randomly.
Pair Corralation between PJ Metal and GeneBioTech
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 1.58 times more return on investment than GeneBioTech. However, PJ Metal is 1.58 times more volatile than GeneBioTech Co. It trades about 0.02 of its potential returns per unit of risk. GeneBioTech Co is currently generating about -0.01 per unit of risk. If you would invest 297,511 in PJ Metal Co on September 26, 2024 and sell it today you would earn a total of 9,489 from holding PJ Metal Co or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Metal Co vs. GeneBioTech Co
Performance |
| Timeline |
| PJ Metal |
| GeneBioTech |
PJ Metal and GeneBioTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and GeneBioTech
The main advantage of trading using opposite PJ Metal and GeneBioTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, GeneBioTech 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 GeneBioTech will offset losses from the drop in GeneBioTech's long position.| PJ Metal vs. Keum Kang Steel | PJ Metal vs. Tplex Co | PJ Metal vs. Samhyun Steel Co | PJ Metal vs. Gyeongnam Steel Co |
| GeneBioTech vs. A Tech Solution Co | GeneBioTech vs. SS TECH | GeneBioTech vs. PJ Metal Co | GeneBioTech vs. Duksan Hi Metal |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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