Correlation Between Pan Entertainment and Shin Steel
Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and Shin Steel 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 Shin Steel 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 Shin Steel Co, you can compare the effects of market volatilities on Pan Entertainment and Shin Steel 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 Shin Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and Shin Steel.
Diversification Opportunities for Pan Entertainment and Shin Steel
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pan and Shin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and Shin Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Steel 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 Shin Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Steel has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and Shin Steel go up and down completely randomly.
Pair Corralation between Pan Entertainment and Shin Steel
Assuming the 90 days trading horizon Pan Entertainment Co is expected to under-perform the Shin Steel. But the stock apears to be less risky and, when comparing its historical volatility, Pan Entertainment Co is 2.4 times less risky than Shin Steel. The stock trades about -0.32 of its potential returns per unit of risk. The Shin Steel Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 241,000 in Shin Steel Co on August 27, 2024 and sell it today you would earn a total of 2,000 from holding Shin Steel Co or generate 0.83% 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. Shin Steel Co
Performance |
| Timeline |
| Pan Entertainment |
| Shin Steel |
Pan Entertainment and Shin Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Entertainment and Shin Steel
The main advantage of trading using opposite Pan Entertainment and Shin Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, Shin Steel 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 Shin Steel will offset losses from the drop in Shin Steel's long position.| Pan Entertainment vs. AfreecaTV Co | Pan Entertainment vs. SS TECH | Pan Entertainment vs. Busan Industrial Co | Pan Entertainment vs. Busan Ind |
| Shin Steel vs. Samsung Electronics Co | Shin Steel vs. Samsung Electronics Co | Shin Steel vs. LG Energy Solution | Shin Steel vs. SK Hynix |
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 Stocks Directory module to find actively traded stocks across global markets.
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