Correlation Between PJ Metal and Shinhan WTI
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Shinhan WTI 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 WTI 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 WTI Futures, you can compare the effects of market volatilities on PJ Metal and Shinhan WTI 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 WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Shinhan WTI.
Diversification Opportunities for PJ Metal and Shinhan WTI
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 128660 and Shinhan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Shinhan WTI Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan WTI Futures 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 WTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan WTI Futures has no effect on the direction of PJ Metal i.e., PJ Metal and Shinhan WTI go up and down completely randomly.
Pair Corralation between PJ Metal and Shinhan WTI
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 1.48 times more return on investment than Shinhan WTI. However, PJ Metal is 1.48 times more volatile than Shinhan WTI Futures. It trades about 0.15 of its potential returns per unit of risk. Shinhan WTI Futures is currently generating about -0.13 per unit of risk. If you would invest 298,500 in PJ Metal Co on November 27, 2024 and sell it today you would earn a total of 16,500 from holding PJ Metal Co or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
PJ Metal Co vs. Shinhan WTI Futures
Performance |
| Timeline |
| PJ Metal |
| Shinhan WTI Futures |
PJ Metal and Shinhan WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Shinhan WTI
The main advantage of trading using opposite PJ Metal and Shinhan WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Shinhan WTI 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 WTI will offset losses from the drop in Shinhan WTI's long position.| PJ Metal vs. Yura Tech Co | PJ Metal vs. iNtRON Biotechnology | PJ Metal vs. Daejung Chemicals Metals | PJ Metal vs. Jeju Beer Co |
| Shinhan WTI vs. Cots Technology Co | Shinhan WTI vs. Kukil Metal Co | Shinhan WTI vs. Daejung Chemicals Metals | Shinhan WTI vs. MS Autotech CoLtd |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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