Correlation Between PJ Metal and CG Hi
Can any of the company-specific risk be diversified away by investing in both PJ Metal and CG Hi 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 CG Hi 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 CG Hi Tech, you can compare the effects of market volatilities on PJ Metal and CG Hi 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 CG Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and CG Hi.
Diversification Opportunities for PJ Metal and CG Hi
Poor diversification
The 3 months correlation between 128660 and 264660 is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and CG Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CG Hi Tech 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 CG Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CG Hi Tech has no effect on the direction of PJ Metal i.e., PJ Metal and CG Hi go up and down completely randomly.
Pair Corralation between PJ Metal and CG Hi
Assuming the 90 days trading horizon PJ Metal is expected to generate 1.23 times less return on investment than CG Hi. In addition to that, PJ Metal is 1.24 times more volatile than CG Hi Tech. It trades about 0.01 of its total potential returns per unit of risk. CG Hi Tech is currently generating about 0.02 per unit of volatility. If you would invest 1,139,596 in CG Hi Tech on October 28, 2024 and sell it today you would earn a total of 57,404 from holding CG Hi Tech or generate 5.04% 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. CG Hi Tech
Performance |
| Timeline |
| PJ Metal |
| CG Hi Tech |
PJ Metal and CG Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and CG Hi
The main advantage of trading using opposite PJ Metal and CG Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, CG Hi 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 CG Hi will offset losses from the drop in CG Hi's long position.| PJ Metal vs. Keum Kang Steel | PJ Metal vs. Samhyun Steel Co | PJ Metal vs. Gyeongnam Steel Co | PJ Metal vs. Jeil Steel Mfg |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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