Correlation Between PJ Metal and Kakao Games
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Kakao Games 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 Kakao Games 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 Kakao Games Corp, you can compare the effects of market volatilities on PJ Metal and Kakao Games 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 Kakao Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Kakao Games.
Diversification Opportunities for PJ Metal and Kakao Games
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 128660 and Kakao is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Kakao Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kakao Games Corp 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 Kakao Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kakao Games Corp has no effect on the direction of PJ Metal i.e., PJ Metal and Kakao Games go up and down completely randomly.
Pair Corralation between PJ Metal and Kakao Games
Assuming the 90 days trading horizon PJ Metal Co is expected to under-perform the Kakao Games. But the stock apears to be less risky and, when comparing its historical volatility, PJ Metal Co is 1.48 times less risky than Kakao Games. The stock trades about -0.2 of its potential returns per unit of risk. The Kakao Games Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,776,000 in Kakao Games Corp on September 1, 2024 and sell it today you would earn a total of 39,000 from holding Kakao Games Corp or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
PJ Metal Co vs. Kakao Games Corp
Performance |
| Timeline |
| PJ Metal |
| Kakao Games Corp |
PJ Metal and Kakao Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Kakao Games
The main advantage of trading using opposite PJ Metal and Kakao Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Kakao Games 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 Kakao Games will offset losses from the drop in Kakao Games' long position.| PJ Metal vs. Shinsung Delta Tech | PJ Metal vs. JYP Entertainment Corp | PJ Metal vs. Cube Entertainment | PJ Metal vs. Amogreentech Co |
| Kakao Games vs. Kukdong Oil Chemicals | Kakao Games vs. PJ Metal Co | Kakao Games vs. Posco Chemical Co | Kakao Games vs. Youngchang Chemical 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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