Correlation Between Pan Entertainment and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and BIT Computer 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 BIT Computer 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 BIT Computer Co, you can compare the effects of market volatilities on Pan Entertainment and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and BIT Computer.
Diversification Opportunities for Pan Entertainment and BIT Computer
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pan and BIT is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and BIT Computer go up and down completely randomly.
Pair Corralation between Pan Entertainment and BIT Computer
Assuming the 90 days trading horizon Pan Entertainment Co is expected to under-perform the BIT Computer. But the stock apears to be less risky and, when comparing its historical volatility, Pan Entertainment Co is 1.28 times less risky than BIT Computer. The stock trades about -0.32 of its potential returns per unit of risk. The BIT Computer Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 486,500 in BIT Computer Co on August 27, 2024 and sell it today you would lose (1,500) from holding BIT Computer Co or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan Entertainment Co vs. BIT Computer Co
Performance |
| Timeline |
| Pan Entertainment |
| BIT Computer |
Pan Entertainment and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Entertainment and BIT Computer
The main advantage of trading using opposite Pan Entertainment and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Pan Entertainment vs. AfreecaTV Co | Pan Entertainment vs. SS TECH | Pan Entertainment vs. Busan Industrial Co | Pan Entertainment vs. Busan Ind |
| BIT Computer vs. Medy Tox | BIT Computer vs. Busan Industrial Co | BIT Computer vs. Busan Ind | BIT Computer vs. Mirae Asset Daewoo |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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