Correlation Between Digital Multimedia and PJ Metal
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia and PJ Metal 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 Digital Multimedia and PJ Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Multimedia Technology and PJ Metal Co, you can compare the effects of market volatilities on Digital Multimedia and PJ Metal 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 Digital Multimedia with a short position of PJ Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and PJ Metal.
Diversification Opportunities for Digital Multimedia and PJ Metal
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Digital and 128660 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and PJ Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Metal and Digital Multimedia 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 Digital Multimedia Technology are associated (or correlated) with PJ Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJ Metal has no effect on the direction of Digital Multimedia i.e., Digital Multimedia and PJ Metal go up and down completely randomly.
Pair Corralation between Digital Multimedia and PJ Metal
Assuming the 90 days trading horizon Digital Multimedia is expected to generate 1.11 times less return on investment than PJ Metal. In addition to that, Digital Multimedia is 1.62 times more volatile than PJ Metal Co. It trades about 0.08 of its total potential returns per unit of risk. PJ Metal Co is currently generating about 0.14 per unit of volatility. If you would invest 298,500 in PJ Metal Co on November 29, 2024 and sell it today you would earn a total of 16,000 from holding PJ Metal Co or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Multimedia Technology vs. PJ Metal Co
Performance |
| Timeline |
| Digital Multimedia |
| PJ Metal |
Digital Multimedia and PJ Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and PJ Metal
The main advantage of trading using opposite Digital Multimedia and PJ Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia position performs unexpectedly, PJ Metal 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 PJ Metal will offset losses from the drop in PJ Metal's long position.| Digital Multimedia vs. Hana Materials | Digital Multimedia vs. Nable Communications | Digital Multimedia vs. National Plastic Co | Digital Multimedia vs. Samick Musical Instruments |
| PJ Metal vs. Lotte Chilsung Beverage | PJ Metal vs. CJ Seafood Corp | PJ Metal vs. Ssangyong Materials Corp | PJ Metal vs. Hyundai Green Food |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |