Correlation Between Pan Entertainment and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and Shinsegae Information 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 Shinsegae Information 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 Shinsegae Information Communication, you can compare the effects of market volatilities on Pan Entertainment and Shinsegae Information 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 Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and Shinsegae Information.
Diversification Opportunities for Pan Entertainment and Shinsegae Information
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pan and Shinsegae is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information 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 Shinsegae Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and Shinsegae Information go up and down completely randomly.
Pair Corralation between Pan Entertainment and Shinsegae Information
Assuming the 90 days trading horizon Pan Entertainment is expected to generate 2.89 times less return on investment than Shinsegae Information. But when comparing it to its historical volatility, Pan Entertainment Co is 1.83 times less risky than Shinsegae Information. It trades about 0.12 of its potential returns per unit of risk. Shinsegae Information Communication is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 905,000 in Shinsegae Information Communication on September 20, 2024 and sell it today you would earn a total of 204,000 from holding Shinsegae Information Communication or generate 22.54% 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. Shinsegae Information Communic
Performance |
| Timeline |
| Pan Entertainment |
| Shinsegae Information |
Pan Entertainment and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Entertainment and Shinsegae Information
The main advantage of trading using opposite Pan Entertainment and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, Shinsegae Information 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 Shinsegae Information will offset losses from the drop in Shinsegae Information's long position.| Pan Entertainment vs. JYP Entertainment | Pan Entertainment vs. Cube Entertainment | Pan Entertainment vs. FNC Entertainment Co |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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