Correlation Between Pan Entertainment and Jeju Semiconductor
Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and Jeju Semiconductor 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 Jeju Semiconductor 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 Jeju Semiconductor Corp, you can compare the effects of market volatilities on Pan Entertainment and Jeju Semiconductor 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 Jeju Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and Jeju Semiconductor.
Diversification Opportunities for Pan Entertainment and Jeju Semiconductor
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pan and Jeju is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor 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 Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and Jeju Semiconductor go up and down completely randomly.
Pair Corralation between Pan Entertainment and Jeju Semiconductor
Assuming the 90 days trading horizon Pan Entertainment Co is expected to under-perform the Jeju Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Pan Entertainment Co is 1.68 times less risky than Jeju Semiconductor. The stock trades about -0.05 of its potential returns per unit of risk. The Jeju Semiconductor Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 387,500 in Jeju Semiconductor Corp on August 25, 2024 and sell it today you would earn a total of 563,500 from holding Jeju Semiconductor Corp or generate 145.42% 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. Jeju Semiconductor Corp
Performance |
| Timeline |
| Pan Entertainment |
| Jeju Semiconductor Corp |
Pan Entertainment and Jeju Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Entertainment and Jeju Semiconductor
The main advantage of trading using opposite Pan Entertainment and Jeju Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, Jeju Semiconductor 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 Jeju Semiconductor will offset losses from the drop in Jeju Semiconductor's long position.| Pan Entertainment vs. AfreecaTV Co | Pan Entertainment vs. SS TECH | Pan Entertainment vs. Busan Industrial Co | Pan Entertainment vs. Busan Ind |
| Jeju Semiconductor vs. Korea Real Estate | Jeju Semiconductor vs. Korea Ratings Co | Jeju Semiconductor vs. IQuest Co | Jeju Semiconductor vs. Wonbang Tech Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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