Correlation Between PJ Metal and NH Investment

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both PJ Metal and NH Investment 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 NH Investment 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 NH Investment Securities, you can compare the effects of market volatilities on PJ Metal and NH Investment 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 NH Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and NH Investment.

Diversification Opportunities for PJ Metal and NH Investment

-0.03
  Correlation Coefficient

Good diversification

The 3 months correlation between 128660 and 005940 is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and NH Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Investment Securities 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 NH Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Investment Securities has no effect on the direction of PJ Metal i.e., PJ Metal and NH Investment go up and down completely randomly.

Pair Corralation between PJ Metal and NH Investment

Assuming the 90 days trading horizon PJ Metal Co is expected to under-perform the NH Investment. In addition to that, PJ Metal is 1.72 times more volatile than NH Investment Securities. It trades about -0.04 of its total potential returns per unit of risk. NH Investment Securities is currently generating about 0.06 per unit of volatility. If you would invest  1,228,000  in NH Investment Securities on September 28, 2024 and sell it today you would earn a total of  167,000  from holding NH Investment Securities or generate 13.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

PJ Metal Co  vs.  NH Investment Securities

 Performance 
       Timeline  
PJ Metal 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
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.
NH Investment Securities 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in NH Investment Securities are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, NH Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PJ Metal and NH Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PJ Metal and NH Investment

The main advantage of trading using opposite PJ Metal and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, NH Investment 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 NH Investment will offset losses from the drop in NH Investment's long position.
The idea behind PJ Metal Co and NH Investment Securities 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

Other Complementary Tools

Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets