Correlation Between Pan Entertainment and TJ Media
Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and TJ Media 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 Pan Entertainment and TJ Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan Entertainment Co and TJ media Co, you can compare the effects of market volatilities on Pan Entertainment and TJ Media 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 Pan Entertainment with a short position of TJ Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and TJ Media.
Diversification Opportunities for Pan Entertainment and TJ Media
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pan and 032540 is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and TJ media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJ media and Pan Entertainment 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 Pan Entertainment Co are associated (or correlated) with TJ Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJ media has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and TJ Media go up and down completely randomly.
Pair Corralation between Pan Entertainment and TJ Media
Assuming the 90 days trading horizon Pan Entertainment Co is expected to generate 1.47 times more return on investment than TJ Media. However, Pan Entertainment is 1.47 times more volatile than TJ media Co. It trades about 0.09 of its potential returns per unit of risk. TJ media Co is currently generating about -0.42 per unit of risk. If you would invest 213,000 in Pan Entertainment Co on August 31, 2024 and sell it today you would earn a total of 6,000 from holding Pan Entertainment Co or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan Entertainment Co vs. TJ media Co
Performance |
| Timeline |
| Pan Entertainment |
| TJ media |
Pan Entertainment and TJ Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Entertainment and TJ Media
The main advantage of trading using opposite Pan Entertainment and TJ Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, TJ Media 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 TJ Media will offset losses from the drop in TJ Media's long position.| Pan Entertainment vs. Mgame Corp | Pan Entertainment vs. Sewoon Medical Co | Pan Entertainment vs. ENERGYMACHINERY KOREA CoLtd | Pan Entertainment vs. Korean Drug Co |
| TJ Media vs. LG Display | TJ Media vs. Hyundai Motor | TJ Media vs. Hyundai Motor Co | TJ Media vs. Hyundai Motor 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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