Correlation Between Camus Engineering and PJ Metal

Can any of the company-specific risk be diversified away by investing in both Camus Engineering 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 Camus Engineering and PJ Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Camus Engineering Construction and PJ Metal Co, you can compare the effects of market volatilities on Camus Engineering 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 Camus Engineering with a short position of PJ Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camus Engineering and PJ Metal.

Diversification Opportunities for Camus Engineering and PJ Metal

0.17

Correlation Coefficient

Camus Engineering  PJ Metal

Average diversification

The 3 months correlation between Camus and 128660 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Camus Engineering Construction and PJ Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Metal and Camus Engineering 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 Camus Engineering Construction 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 Camus Engineering i.e., Camus Engineering and PJ Metal go up and down completely randomly.

Pair Corralation between Camus Engineering and PJ Metal

Assuming the 90 days trading horizon Camus Engineering is expected to generate 1.94 times less return on investment than PJ Metal. But when comparing it to its historical volatility, Camus Engineering Construction is 1.73 times less risky than PJ Metal. It trades about 0.02 of its potential returns per unit of risk. PJ Metal Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  299,000  in PJ Metal Co on September 15, 2024 and sell it today you would earn a total of  3,500  from holding PJ Metal Co or generate 1.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Camus Engineering Construction  vs.  PJ Metal Co

Camus Engineering

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Camus Engineering Construction are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Camus Engineering is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PJ Metal

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PJ Metal Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, PJ Metal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Camus Engineering and PJ Metal

The main advantage of trading using opposite Camus Engineering and PJ Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camus Engineering 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.

The idea behind Camus Engineering Construction and PJ Metal Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.