Correlation Between Pan Entertainment and Phoenix Materials
Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and Phoenix Materials 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 Phoenix Materials 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 Phoenix Materials Co, you can compare the effects of market volatilities on Pan Entertainment and Phoenix Materials 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 Phoenix Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and Phoenix Materials.
Diversification Opportunities for Pan Entertainment and Phoenix Materials
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pan and Phoenix is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and Phoenix Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Materials 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 Phoenix Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Materials has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and Phoenix Materials go up and down completely randomly.
Pair Corralation between Pan Entertainment and Phoenix Materials
Assuming the 90 days trading horizon Pan Entertainment Co is expected to under-perform the Phoenix Materials. But the stock apears to be less risky and, when comparing its historical volatility, Pan Entertainment Co is 2.26 times less risky than Phoenix Materials. The stock trades about -0.11 of its potential returns per unit of risk. The Phoenix Materials Co is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 107,800 in Phoenix Materials Co on September 4, 2024 and sell it today you would lose (41,900) from holding Phoenix Materials Co or give up 38.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan Entertainment Co vs. Phoenix Materials Co
Performance |
| Timeline |
| Pan Entertainment |
| Phoenix Materials |
Pan Entertainment and Phoenix Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Entertainment and Phoenix Materials
The main advantage of trading using opposite Pan Entertainment and Phoenix Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, Phoenix Materials 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 Phoenix Materials will offset losses from the drop in Phoenix Materials' long position.| Pan Entertainment vs. Sangshin Electronics Co | Pan Entertainment vs. Samji Electronics Co | Pan Entertainment vs. Samwha Electronics Co | Pan Entertainment vs. UJU Electronics Co |
| Phoenix Materials vs. Dongsin Engineering Construction | Phoenix Materials vs. Doosan Fuel Cell | Phoenix Materials vs. Daishin Balance 1 | Phoenix Materials vs. Total Soft Bank |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |