Correlation Between Hyundai Green and PJ Metal
Can any of the company-specific risk be diversified away by investing in both Hyundai Green 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 Hyundai Green and PJ Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Green Food and PJ Metal Co, you can compare the effects of market volatilities on Hyundai Green 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 Hyundai Green with a short position of PJ Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Green and PJ Metal.
Diversification Opportunities for Hyundai Green and PJ Metal
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and 128660 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Green Food and PJ Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Metal and Hyundai Green 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 Hyundai Green Food 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 Hyundai Green i.e., Hyundai Green and PJ Metal go up and down completely randomly.
Pair Corralation between Hyundai Green and PJ Metal
Assuming the 90 days trading horizon Hyundai Green Food is expected to under-perform the PJ Metal. In addition to that, Hyundai Green is 2.96 times more volatile than PJ Metal Co. It trades about -0.15 of its total potential returns per unit of risk. PJ Metal Co is currently generating about 0.15 per unit of volatility. If you would invest 295,000 in PJ Metal Co on October 26, 2024 and sell it today you would earn a total of 5,000 from holding PJ Metal Co or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Green Food vs. PJ Metal Co
Performance |
| Timeline |
| Hyundai Green Food |
| PJ Metal |
Hyundai Green and PJ Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Green and PJ Metal
The main advantage of trading using opposite Hyundai Green and PJ Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Green 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.| Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. LG Energy Solution | Hyundai Green vs. SK Hynix |
| PJ Metal vs. Korea Investment Holdings | PJ Metal vs. Pureun Mutual Savings | PJ Metal vs. CKH Food Health | 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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