Correlation Between Pingtan Marine and Johnson Matthey
Can any of the company-specific risk be diversified away by investing in both Pingtan Marine and Johnson Matthey 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 Pingtan Marine and Johnson Matthey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pingtan Marine Enterprise and Johnson Matthey PLC, you can compare the effects of market volatilities on Pingtan Marine and Johnson Matthey 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 Pingtan Marine with a short position of Johnson Matthey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pingtan Marine and Johnson Matthey.
Diversification Opportunities for Pingtan Marine and Johnson Matthey
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pingtan and Johnson is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pingtan Marine Enterprise and Johnson Matthey PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Matthey PLC and Pingtan Marine 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 Pingtan Marine Enterprise are associated (or correlated) with Johnson Matthey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Matthey PLC has no effect on the direction of Pingtan Marine i.e., Pingtan Marine and Johnson Matthey go up and down completely randomly.
Pair Corralation between Pingtan Marine and Johnson Matthey
If you would invest 27.00 in Pingtan Marine Enterprise on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Pingtan Marine Enterprise or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Pingtan Marine Enterprise vs. Johnson Matthey PLC
Performance |
| Timeline |
| Pingtan Marine Enterprise |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Johnson Matthey PLC |
Pingtan Marine and Johnson Matthey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pingtan Marine and Johnson Matthey
The main advantage of trading using opposite Pingtan Marine and Johnson Matthey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pingtan Marine position performs unexpectedly, Johnson Matthey 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 Johnson Matthey will offset losses from the drop in Johnson Matthey's long position.| Pingtan Marine vs. NetSol Technologies | Pingtan Marine vs. Kaltura | Pingtan Marine vs. Datadog | Pingtan Marine vs. VirnetX Holding Corp |
| Johnson Matthey vs. First Graphene | Johnson Matthey vs. HUMANA INC | Johnson Matthey vs. Aquagold International | Johnson Matthey vs. Barloworld Ltd ADR |
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.
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