Correlation Between PJ Metal and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Shinhan Inverse 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 Shinhan Inverse 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 Shinhan Inverse Silver, you can compare the effects of market volatilities on PJ Metal and Shinhan Inverse 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 Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Shinhan Inverse.
Diversification Opportunities for PJ Metal and Shinhan Inverse
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 128660 and Shinhan is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Shinhan Inverse Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse Silver 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 Shinhan Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Inverse Silver has no effect on the direction of PJ Metal i.e., PJ Metal and Shinhan Inverse go up and down completely randomly.
Pair Corralation between PJ Metal and Shinhan Inverse
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 1.67 times more return on investment than Shinhan Inverse. However, PJ Metal is 1.67 times more volatile than Shinhan Inverse Silver. It trades about 0.01 of its potential returns per unit of risk. Shinhan Inverse Silver is currently generating about -0.12 per unit of risk. If you would invest 299,500 in PJ Metal Co on September 14, 2024 and sell it today you would earn a total of 0.00 from holding PJ Metal Co or generate 0.0% 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. Shinhan Inverse Silver
Performance |
| Timeline |
| PJ Metal |
| Shinhan Inverse Silver |
PJ Metal and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Shinhan Inverse
The main advantage of trading using opposite PJ Metal and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Shinhan Inverse 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 Shinhan Inverse will offset losses from the drop in Shinhan Inverse's long position.| PJ Metal vs. Miwon Chemicals Co | PJ Metal vs. Seoam Machinery Industry | PJ Metal vs. Dongbang Ship Machinery | PJ Metal vs. Mirai Semiconductors Co |
| Shinhan Inverse vs. PJ Metal Co | Shinhan Inverse vs. Polaris Office Corp | Shinhan Inverse vs. Sempio Foods Co | Shinhan Inverse vs. Korea Alcohol Industrial |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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