Correlation Between Hana Materials and PJ Electronics
Can any of the company-specific risk be diversified away by investing in both Hana Materials and PJ Electronics 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 Hana Materials and PJ Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and PJ Electronics Co, you can compare the effects of market volatilities on Hana Materials and PJ Electronics 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 Hana Materials with a short position of PJ Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and PJ Electronics.
Diversification Opportunities for Hana Materials and PJ Electronics
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hana and 006140 is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and PJ Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Electronics and Hana Materials 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 Hana Materials are associated (or correlated) with PJ Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJ Electronics has no effect on the direction of Hana Materials i.e., Hana Materials and PJ Electronics go up and down completely randomly.
Pair Corralation between Hana Materials and PJ Electronics
Assuming the 90 days trading horizon Hana Materials is expected to generate 2.03 times more return on investment than PJ Electronics. However, Hana Materials is 2.03 times more volatile than PJ Electronics Co. It trades about 0.17 of its potential returns per unit of risk. PJ Electronics Co is currently generating about 0.29 per unit of risk. If you would invest 2,385,000 in Hana Materials on October 17, 2024 and sell it today you would earn a total of 280,000 from holding Hana Materials or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Materials vs. PJ Electronics Co
Performance |
| Timeline |
| Hana Materials |
| PJ Electronics |
Hana Materials and PJ Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and PJ Electronics
The main advantage of trading using opposite Hana Materials and PJ Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials position performs unexpectedly, PJ Electronics 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 Electronics will offset losses from the drop in PJ Electronics' long position.| Hana Materials vs. RF Materials Co | Hana Materials vs. National Plastic Co | Hana Materials vs. ENERGYMACHINERY KOREA CoLtd | Hana Materials vs. Dongkuk Structures Construction |
| PJ Electronics vs. Hana Materials | PJ Electronics vs. TS Investment Corp | PJ Electronics vs. Phoenix Materials Co | PJ Electronics vs. KTB Investment Securities |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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