Correlation Between Hana Materials and PJ Metal
Can any of the company-specific risk be diversified away by investing in both Hana Materials 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 Hana Materials and PJ Metal 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 Metal Co, you can compare the effects of market volatilities on Hana Materials 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 Hana Materials with a short position of PJ Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and PJ Metal.
Diversification Opportunities for Hana Materials and PJ Metal
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hana and 128660 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and PJ Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Metal 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 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 Hana Materials i.e., Hana Materials and PJ Metal go up and down completely randomly.
Pair Corralation between Hana Materials and PJ Metal
Assuming the 90 days trading horizon Hana Materials is expected to under-perform the PJ Metal. In addition to that, Hana Materials is 1.52 times more volatile than PJ Metal Co. It trades about -0.32 of its total potential returns per unit of risk. PJ Metal Co is currently generating about -0.16 per unit of volatility. If you would invest 327,000 in PJ Metal Co on August 29, 2024 and sell it today you would lose (20,000) from holding PJ Metal Co or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Materials vs. PJ Metal Co
Performance |
| Timeline |
| Hana Materials |
| PJ Metal |
Hana Materials and PJ Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and PJ Metal
The main advantage of trading using opposite Hana Materials and PJ Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials 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.| Hana Materials vs. SK Hynix | Hana Materials vs. People Technology | Hana Materials vs. SIMMTECH Co | Hana Materials vs. Haesung DS Co |
| PJ Metal vs. Keum Kang Steel | PJ Metal vs. Tplex Co | PJ Metal vs. Samhyun Steel Co | PJ Metal vs. Wonil Special Steel |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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