Correlation Between Pan Entertainment and Sangshin Electronics
Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and Sangshin Electronics 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 Sangshin Electronics 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 Sangshin Electronics Co, you can compare the effects of market volatilities on Pan Entertainment and Sangshin Electronics 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 Sangshin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and Sangshin Electronics.
Diversification Opportunities for Pan Entertainment and Sangshin Electronics
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pan and Sangshin is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and Sangshin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangshin Electronics 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 Sangshin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangshin Electronics has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and Sangshin Electronics go up and down completely randomly.
Pair Corralation between Pan Entertainment and Sangshin Electronics
Assuming the 90 days trading horizon Pan Entertainment Co is expected to under-perform the Sangshin Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Pan Entertainment Co is 1.49 times less risky than Sangshin Electronics. The stock trades about -0.06 of its potential returns per unit of risk. The Sangshin Electronics Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 340,500 in Sangshin Electronics Co on September 12, 2024 and sell it today you would lose (76,000) from holding Sangshin Electronics Co or give up 22.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan Entertainment Co vs. Sangshin Electronics Co
Performance |
| Timeline |
| Pan Entertainment |
| Sangshin Electronics |
Pan Entertainment and Sangshin Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Entertainment and Sangshin Electronics
The main advantage of trading using opposite Pan Entertainment and Sangshin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, Sangshin Electronics 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 Sangshin Electronics will offset losses from the drop in Sangshin Electronics' long position.| Pan Entertainment vs. YG Entertainment | Pan Entertainment vs. JYP Entertainment | Pan Entertainment vs. Cube Entertainment | Pan Entertainment vs. FNC Entertainment Co |
| Sangshin Electronics vs. Daejoo Electronic Materials | Sangshin Electronics vs. Interflex Co | Sangshin Electronics vs. Solution Advanced Technology | Sangshin Electronics vs. Busan Industrial 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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