Correlation Between PJ Metal and Finebesteel
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Finebesteel 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 Finebesteel 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 Finebesteel, you can compare the effects of market volatilities on PJ Metal and Finebesteel 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 Finebesteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Finebesteel.
Diversification Opportunities for PJ Metal and Finebesteel
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 128660 and Finebesteel is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Finebesteel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finebesteel 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 Finebesteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finebesteel has no effect on the direction of PJ Metal i.e., PJ Metal and Finebesteel go up and down completely randomly.
Pair Corralation between PJ Metal and Finebesteel
Assuming the 90 days trading horizon PJ Metal is expected to generate 5.64 times less return on investment than Finebesteel. In addition to that, PJ Metal is 1.09 times more volatile than Finebesteel. It trades about 0.0 of its total potential returns per unit of risk. Finebesteel is currently generating about 0.02 per unit of volatility. If you would invest 100,900 in Finebesteel on November 3, 2024 and sell it today you would earn a total of 5,600 from holding Finebesteel or generate 5.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Metal Co vs. Finebesteel
Performance |
| Timeline |
| PJ Metal |
| Finebesteel |
PJ Metal and Finebesteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Finebesteel
The main advantage of trading using opposite PJ Metal and Finebesteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Finebesteel 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 Finebesteel will offset losses from the drop in Finebesteel'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 |
| Finebesteel vs. ADTechnology CoLtd | Finebesteel vs. Bosung Power Technology | Finebesteel vs. Eugene Technology CoLtd | Finebesteel vs. Daesung Hi 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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