Correlation Between InfoBank and Pan Entertainment
Can any of the company-specific risk be diversified away by investing in both InfoBank and Pan Entertainment 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 InfoBank and Pan Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InfoBank and Pan Entertainment Co, you can compare the effects of market volatilities on InfoBank and Pan Entertainment 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 InfoBank with a short position of Pan Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of InfoBank and Pan Entertainment.
Diversification Opportunities for InfoBank and Pan Entertainment
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between InfoBank and Pan is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding InfoBank and Pan Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Entertainment and InfoBank 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 InfoBank are associated (or correlated) with Pan Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Entertainment has no effect on the direction of InfoBank i.e., InfoBank and Pan Entertainment go up and down completely randomly.
Pair Corralation between InfoBank and Pan Entertainment
Assuming the 90 days trading horizon InfoBank is expected to generate 1.73 times more return on investment than Pan Entertainment. However, InfoBank is 1.73 times more volatile than Pan Entertainment Co. It trades about -0.04 of its potential returns per unit of risk. Pan Entertainment Co is currently generating about -0.07 per unit of risk. If you would invest 1,199,849 in InfoBank on October 18, 2024 and sell it today you would lose (428,849) from holding InfoBank or give up 35.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InfoBank vs. Pan Entertainment Co
Performance |
| Timeline |
| InfoBank |
| Pan Entertainment |
InfoBank and Pan Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InfoBank and Pan Entertainment
The main advantage of trading using opposite InfoBank and Pan Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfoBank position performs unexpectedly, Pan Entertainment 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 Pan Entertainment will offset losses from the drop in Pan Entertainment's long position.| InfoBank vs. V One Tech Co | InfoBank vs. Dongbang Transport Logistics | InfoBank vs. Hwangkum Steel Technology | InfoBank vs. Cots Technology Co |
| Pan Entertainment vs. Korea Computer | Pan Entertainment vs. CG Hi Tech | Pan Entertainment vs. Lotte Non Life Insurance | Pan Entertainment vs. LG Household Healthcare |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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