Correlation Between Pan Entertainment and Barunson Entertainment
Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and Barunson 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 Pan Entertainment and Barunson Entertainment 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 Barunson Entertainment Arts, you can compare the effects of market volatilities on Pan Entertainment and Barunson 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 Pan Entertainment with a short position of Barunson Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and Barunson Entertainment.
Diversification Opportunities for Pan Entertainment and Barunson Entertainment
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pan and Barunson is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and Barunson Entertainment Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barunson Entertainment 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 Barunson Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barunson Entertainment has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and Barunson Entertainment go up and down completely randomly.
Pair Corralation between Pan Entertainment and Barunson Entertainment
Assuming the 90 days trading horizon Pan Entertainment Co is expected to generate 0.75 times more return on investment than Barunson Entertainment. However, Pan Entertainment Co is 1.33 times less risky than Barunson Entertainment. It trades about 0.09 of its potential returns per unit of risk. Barunson Entertainment Arts is currently generating about -0.1 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. Barunson Entertainment Arts
Performance |
| Timeline |
| Pan Entertainment |
| Barunson Entertainment |
Pan Entertainment and Barunson Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Entertainment and Barunson Entertainment
The main advantage of trading using opposite Pan Entertainment and Barunson Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, Barunson 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 Barunson Entertainment will offset losses from the drop in Barunson Entertainment'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 |
| Barunson Entertainment vs. Sungmoon Electronics Co | Barunson Entertainment vs. KyungIn Electronics Co | Barunson Entertainment vs. LG Electronics Pfd | Barunson Entertainment vs. Sunny Electronics Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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