Correlation Between Playgram and EMnet
Can any of the company-specific risk be diversified away by investing in both Playgram and EMnet 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 Playgram and EMnet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playgram Co and eMnet Inc, you can compare the effects of market volatilities on Playgram and EMnet 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 Playgram with a short position of EMnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playgram and EMnet.
Diversification Opportunities for Playgram and EMnet
Average diversification
The 3 months correlation between Playgram and EMnet is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Playgram Co and eMnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eMnet Inc and Playgram 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 Playgram Co are associated (or correlated) with EMnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eMnet Inc has no effect on the direction of Playgram i.e., Playgram and EMnet go up and down completely randomly.
Pair Corralation between Playgram and EMnet
Assuming the 90 days trading horizon Playgram is expected to generate 1.05 times less return on investment than EMnet. In addition to that, Playgram is 1.26 times more volatile than eMnet Inc. It trades about 0.1 of its total potential returns per unit of risk. eMnet Inc is currently generating about 0.14 per unit of volatility. If you would invest 231,979 in eMnet Inc on October 25, 2024 and sell it today you would earn a total of 14,521 from holding eMnet Inc or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Playgram Co vs. eMnet Inc
Performance |
| Timeline |
| Playgram |
| eMnet Inc |
Playgram and EMnet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playgram and EMnet
The main advantage of trading using opposite Playgram and EMnet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playgram position performs unexpectedly, EMnet 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 EMnet will offset losses from the drop in EMnet's long position.| Playgram vs. LG Chemicals | Playgram vs. POSCO Holdings | Playgram vs. Hanwha Solutions | Playgram vs. Lotte Chemical Corp |
| EMnet vs. Kisan Telecom Co | EMnet vs. Wireless Power Amplifier | EMnet vs. Nice Information Telecommunication | EMnet vs. ECSTELECOM 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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