Correlation Between Anam Electronics and Pharmicell
Can any of the company-specific risk be diversified away by investing in both Anam Electronics and Pharmicell 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 Anam Electronics and Pharmicell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anam Electronics Co and Pharmicell, you can compare the effects of market volatilities on Anam Electronics and Pharmicell 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 Anam Electronics with a short position of Pharmicell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anam Electronics and Pharmicell.
Diversification Opportunities for Anam Electronics and Pharmicell
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anam and Pharmicell is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Anam Electronics Co and Pharmicell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharmicell and Anam Electronics 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 Anam Electronics Co are associated (or correlated) with Pharmicell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharmicell has no effect on the direction of Anam Electronics i.e., Anam Electronics and Pharmicell go up and down completely randomly.
Pair Corralation between Anam Electronics and Pharmicell
Assuming the 90 days trading horizon Anam Electronics Co is expected to under-perform the Pharmicell. But the stock apears to be less risky and, when comparing its historical volatility, Anam Electronics Co is 4.19 times less risky than Pharmicell. The stock trades about -0.47 of its potential returns per unit of risk. The Pharmicell is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 879,000 in Pharmicell on November 7, 2024 and sell it today you would lose (81,000) from holding Pharmicell or give up 9.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anam Electronics Co vs. Pharmicell
Performance |
| Timeline |
| Anam Electronics |
| Pharmicell |
Anam Electronics and Pharmicell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anam Electronics and Pharmicell
The main advantage of trading using opposite Anam Electronics and Pharmicell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anam Electronics position performs unexpectedly, Pharmicell 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 Pharmicell will offset losses from the drop in Pharmicell's long position.| Anam Electronics vs. Korea Petro Chemical | Anam Electronics vs. Hotel Shilla Co | Anam Electronics vs. Seoul Semiconductor Co | Anam Electronics vs. Namhae Chemical |
| Pharmicell vs. LAKE MATERIALS LTD | Pharmicell vs. Hanil Chemical Ind | Pharmicell vs. SAMG Entertainment Co | Pharmicell vs. UJU Electronics Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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