Correlation Between Pan Entertainment and Mgame Corp
Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and Mgame Corp 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 Mgame Corp 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 Mgame Corp, you can compare the effects of market volatilities on Pan Entertainment and Mgame Corp 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 Mgame Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and Mgame Corp.
Diversification Opportunities for Pan Entertainment and Mgame Corp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pan and Mgame is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and Mgame Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mgame Corp 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 Mgame Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mgame Corp has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and Mgame Corp go up and down completely randomly.
Pair Corralation between Pan Entertainment and Mgame Corp
Assuming the 90 days trading horizon Pan Entertainment Co is expected to generate 0.42 times more return on investment than Mgame Corp. However, Pan Entertainment Co is 2.4 times less risky than Mgame Corp. It trades about 0.11 of its potential returns per unit of risk. Mgame Corp is currently generating about -0.03 per unit of risk. If you would invest 203,500 in Pan Entertainment Co on September 2, 2024 and sell it today you would earn a total of 20,500 from holding Pan Entertainment Co or generate 10.07% 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. Mgame Corp
Performance |
| Timeline |
| Pan Entertainment |
| Mgame Corp |
Pan Entertainment and Mgame Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Entertainment and Mgame Corp
The main advantage of trading using opposite Pan Entertainment and Mgame Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, Mgame Corp 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 Mgame Corp will offset losses from the drop in Mgame Corp's long position.| Pan Entertainment vs. AfreecaTV Co | Pan Entertainment vs. Seegene | Pan Entertainment vs. SS TECH | Pan Entertainment vs. Busan Industrial 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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