Correlation Between E Investment and PJ Electronics

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

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

Diversification Opportunities for E Investment and PJ Electronics

0.0

Correlation Coefficient

E Investment  PJ Electronics

Pay attention - limited upside

The 3 months correlation between 093230 and 006140 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding E Investment Development and PJ Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJ Electronics and E Investment 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 E Investment Development are associated (or correlated) with PJ Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJ Electronics has no effect on the direction of E Investment i.e., E Investment and PJ Electronics go up and down completely randomly.

Pair Corralation between E Investment and PJ Electronics

If you would invest  139,200  in E Investment Development on September 23, 2024 and sell it today you would earn a total of  0.00  from holding E Investment Development or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.73%
Values	Daily Returns

E Investment Development  vs.  PJ Electronics Co

E Investment Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E Investment Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, E Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PJ Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PJ Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with E Investment and PJ Electronics

The main advantage of trading using opposite E Investment and PJ Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Investment position performs unexpectedly, PJ Electronics 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 Electronics will offset losses from the drop in PJ Electronics' long position.

The idea behind E Investment Development and PJ Electronics 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.