Correlation Between PJ Metal and CS BEARING
Can any of the company-specific risk be diversified away by investing in both PJ Metal and CS BEARING 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 CS BEARING 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 CS BEARING CoLtd, you can compare the effects of market volatilities on PJ Metal and CS BEARING 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 CS BEARING. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and CS BEARING.
Diversification Opportunities for PJ Metal and CS BEARING
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 128660 and 297090 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and CS BEARING CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CS BEARING CoLtd 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 CS BEARING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CS BEARING CoLtd has no effect on the direction of PJ Metal i.e., PJ Metal and CS BEARING go up and down completely randomly.
Pair Corralation between PJ Metal and CS BEARING
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 0.82 times more return on investment than CS BEARING. However, PJ Metal Co is 1.21 times less risky than CS BEARING. It trades about -0.02 of its potential returns per unit of risk. CS BEARING CoLtd is currently generating about -0.09 per unit of risk. If you would invest 399,253 in PJ Metal Co on September 12, 2024 and sell it today you would lose (114,753) from holding PJ Metal Co or give up 28.74% 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. CS BEARING CoLtd
Performance |
| Timeline |
| PJ Metal |
| CS BEARING CoLtd |
PJ Metal and CS BEARING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and CS BEARING
The main advantage of trading using opposite PJ Metal and CS BEARING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, CS BEARING 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 CS BEARING will offset losses from the drop in CS BEARING's long position.| PJ Metal vs. Dongwon Metal Co | PJ Metal vs. DONGKUK TED METAL | PJ Metal vs. BNK Financial Group | PJ Metal vs. KB Financial Group |
| CS BEARING vs. SBI Investment KOREA | CS BEARING vs. Lotte Data Communication | CS BEARING vs. Coloray International Investment | CS BEARING vs. DSC Investment |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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