Correlation Between PJ Metal and ChipsMedia
Can any of the company-specific risk be diversified away by investing in both PJ Metal and ChipsMedia 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 ChipsMedia 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 ChipsMedia, you can compare the effects of market volatilities on PJ Metal and ChipsMedia 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 ChipsMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and ChipsMedia.
Diversification Opportunities for PJ Metal and ChipsMedia
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 128660 and ChipsMedia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and ChipsMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipsMedia 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 ChipsMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipsMedia has no effect on the direction of PJ Metal i.e., PJ Metal and ChipsMedia go up and down completely randomly.
Pair Corralation between PJ Metal and ChipsMedia
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 0.8 times more return on investment than ChipsMedia. However, PJ Metal Co is 1.25 times less risky than ChipsMedia. It trades about 0.0 of its potential returns per unit of risk. ChipsMedia is currently generating about -0.01 per unit of risk. If you would invest 326,879 in PJ Metal Co on November 3, 2024 and sell it today you would lose (28,379) from holding PJ Metal Co or give up 8.68% 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. ChipsMedia
Performance |
| Timeline |
| PJ Metal |
| ChipsMedia |
PJ Metal and ChipsMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and ChipsMedia
The main advantage of trading using opposite PJ Metal and ChipsMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, ChipsMedia 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 ChipsMedia will offset losses from the drop in ChipsMedia's long position.| PJ Metal vs. Korea Investment Holdings | PJ Metal vs. MEDIANA CoLtd | PJ Metal vs. SM Entertainment Co | PJ Metal vs. SKONEC Entertainment Co |
| ChipsMedia vs. LG Household Healthcare | ChipsMedia vs. Adaptive Plasma Technology | ChipsMedia vs. Korea Information Communications | ChipsMedia vs. Seers Technology |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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