Correlation Between PJ Metal and Miwon Chemicals
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Miwon Chemicals 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 Miwon Chemicals 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 Miwon Chemicals Co, you can compare the effects of market volatilities on PJ Metal and Miwon Chemicals 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 Miwon Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Miwon Chemicals.
Diversification Opportunities for PJ Metal and Miwon Chemicals
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 128660 and Miwon is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Miwon Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miwon Chemicals 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 Miwon Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miwon Chemicals has no effect on the direction of PJ Metal i.e., PJ Metal and Miwon Chemicals go up and down completely randomly.
Pair Corralation between PJ Metal and Miwon Chemicals
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 0.69 times more return on investment than Miwon Chemicals. However, PJ Metal Co is 1.46 times less risky than Miwon Chemicals. It trades about -0.23 of its potential returns per unit of risk. Miwon Chemicals Co is currently generating about -0.18 per unit of risk. If you would invest 303,500 in PJ Metal Co on November 6, 2024 and sell it today you would lose (5,000) from holding PJ Metal Co or give up 1.65% 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. Miwon Chemicals Co
Performance |
| Timeline |
| PJ Metal |
| Miwon Chemicals |
PJ Metal and Miwon Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Miwon Chemicals
The main advantage of trading using opposite PJ Metal and Miwon Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Miwon Chemicals 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 Miwon Chemicals will offset losses from the drop in Miwon Chemicals' long position.| PJ Metal vs. Woori Technology | PJ Metal vs. Guyoung Technology Co | PJ Metal vs. Youl Chon Chemical | PJ Metal vs. YeaRimDang Publishing Co |
| Miwon Chemicals vs. Dongbang Ship Machinery | Miwon Chemicals vs. Woorim Machinery Co | Miwon Chemicals vs. Dongbang Transport Logistics | Miwon Chemicals vs. WooDeumGee Farm 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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