Correlation Between PJ Metal and CS BEARING

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

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

Diversification Opportunities for PJ Metal and CS BEARING

0.15

Correlation Coefficient

PJ Metal  CS BEARING

Average diversification

The 3 months correlation between 128660 and 297090 is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and CS BEARING CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CS BEARING CoLtd and PJ Metal 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 PJ Metal Co are associated (or correlated) with CS BEARING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CS BEARING CoLtd has no effect on the direction of PJ Metal i.e., PJ Metal and CS BEARING go up and down completely randomly.

Pair Corralation between PJ Metal and CS BEARING

Assuming the 90 days trading horizon PJ Metal is expected to generate 8.97 times less return on investment than CS BEARING. But when comparing it to its historical volatility, PJ Metal Co is 2.31 times less risky than CS BEARING. It trades about 0.01 of its potential returns per unit of risk. CS BEARING CoLtd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  437,500  in CS BEARING CoLtd on December 29, 2024 and sell it today you would earn a total of  30,500  from holding CS BEARING CoLtd or generate 6.97% return on investment over 90 days.

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

PJ Metal Co  vs.  CS BEARING CoLtd

PJ Metal

Risk-Adjusted Performance

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.

CS BEARING CoLtd

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CS BEARING CoLtd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CS BEARING may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PJ Metal and CS BEARING

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

The idea behind PJ Metal Co and CS BEARING CoLtd 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.