Correlation Between KakaoBank Corp and PJ Metal
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp 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 KakaoBank Corp and PJ Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and PJ Metal Co, you can compare the effects of market volatilities on KakaoBank Corp 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 KakaoBank Corp with a short position of PJ Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and PJ Metal.
Diversification Opportunities for KakaoBank Corp and PJ Metal
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KakaoBank and 128660 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and PJ Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Metal and KakaoBank Corp 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 KakaoBank Corp 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 KakaoBank Corp i.e., KakaoBank Corp and PJ Metal go up and down completely randomly.
Pair Corralation between KakaoBank Corp and PJ Metal
Assuming the 90 days trading horizon KakaoBank Corp is expected to under-perform the PJ Metal. But the stock apears to be less risky and, when comparing its historical volatility, KakaoBank Corp is 1.17 times less risky than PJ Metal. The stock trades about -0.01 of its potential returns per unit of risk. The PJ Metal Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 301,604 in PJ Metal Co on October 12, 2024 and sell it today you would earn a total of 896.00 from holding PJ Metal Co or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KakaoBank Corp vs. PJ Metal Co
Performance |
| Timeline |
| KakaoBank Corp |
| PJ Metal |
KakaoBank Corp and PJ Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and PJ Metal
The main advantage of trading using opposite KakaoBank Corp and PJ Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp 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.| KakaoBank Corp vs. Korean Drug Co | KakaoBank Corp vs. Nice Information Telecommunication | KakaoBank Corp vs. Daou Data Corp | KakaoBank Corp vs. Daishin Information Communications |
| PJ Metal vs. KakaoBank Corp | PJ Metal vs. Kbi Metal Co | PJ Metal vs. Jb Financial | PJ Metal vs. KB Financial Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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