Correlation Between PJ Metal and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Dongil Metal 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 Dongil Metal 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 Dongil Metal Co, you can compare the effects of market volatilities on PJ Metal and Dongil Metal 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 Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Dongil Metal.
Diversification Opportunities for PJ Metal and Dongil Metal
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between 128660 and Dongil is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil 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 Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of PJ Metal i.e., PJ Metal and Dongil Metal go up and down completely randomly.
Pair Corralation between PJ Metal and Dongil Metal
Assuming the 90 days trading horizon PJ Metal Co is expected to under-perform the Dongil Metal. In addition to that, PJ Metal is 2.52 times more volatile than Dongil Metal Co. It trades about -0.16 of its total potential returns per unit of risk. Dongil Metal Co is currently generating about -0.2 per unit of volatility. If you would invest 866,000 in Dongil Metal Co on August 28, 2024 and sell it today you would lose (26,000) from holding Dongil Metal Co or give up 3.0% 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. Dongil Metal Co
Performance |
| Timeline |
| PJ Metal |
| Dongil Metal |
PJ Metal and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Dongil Metal
The main advantage of trading using opposite PJ Metal and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal's long position.| PJ Metal vs. Keum Kang Steel | PJ Metal vs. Tplex Co | PJ Metal vs. Samhyun Steel Co | PJ Metal vs. Wonil Special Steel |
| Dongil Metal vs. LG Chemicals | Dongil Metal vs. Lotte Chemical Corp | Dongil Metal vs. Hyundai Steel | Dongil Metal vs. Seah Steel Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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