Correlation Between Pan Entertainment and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and Hyundai Home 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 Hyundai Home 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 Hyundai Home Shopping, you can compare the effects of market volatilities on Pan Entertainment and Hyundai Home 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 Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and Hyundai Home.
Diversification Opportunities for Pan Entertainment and Hyundai Home
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pan and Hyundai is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and Hyundai Home Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Home Shopping 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 Hyundai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Home Shopping has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and Hyundai Home go up and down completely randomly.
Pair Corralation between Pan Entertainment and Hyundai Home
Assuming the 90 days trading horizon Pan Entertainment Co is expected to generate 1.97 times more return on investment than Hyundai Home. However, Pan Entertainment is 1.97 times more volatile than Hyundai Home Shopping. It trades about 0.11 of its potential returns per unit of risk. Hyundai Home Shopping is currently generating about 0.18 per unit of risk. If you would invest 200,500 in Pan Entertainment Co on September 25, 2024 and sell it today you would earn a total of 13,500 from holding Pan Entertainment Co or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan Entertainment Co vs. Hyundai Home Shopping
Performance |
| Timeline |
| Pan Entertainment |
| Hyundai Home Shopping |
Pan Entertainment and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Entertainment and Hyundai Home
The main advantage of trading using opposite Pan Entertainment and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, Hyundai Home 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 Hyundai Home will offset losses from the drop in Hyundai Home's long position.| Pan Entertainment vs. Alton Sports CoLtd | Pan Entertainment vs. Eagle Veterinary Technology | Pan Entertainment vs. Inzi Display CoLtd | Pan Entertainment vs. Playgram Co |
| Hyundai Home vs. ITM Semiconductor Co | Hyundai Home vs. Shinsegae Food | Hyundai Home vs. Alton Sports CoLtd | Hyundai Home vs. Digital Multimedia Technology |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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