Correlation Between EMnet and Playgram
Can any of the company-specific risk be diversified away by investing in both EMnet and Playgram 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 EMnet and Playgram into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eMnet Inc and Playgram Co, you can compare the effects of market volatilities on EMnet and Playgram 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 EMnet with a short position of Playgram. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMnet and Playgram.
Diversification Opportunities for EMnet and Playgram
Average diversification
The 3 months correlation between EMnet and Playgram is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding eMnet Inc and Playgram Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playgram and EMnet 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 eMnet Inc are associated (or correlated) with Playgram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playgram has no effect on the direction of EMnet i.e., EMnet and Playgram go up and down completely randomly.
Pair Corralation between EMnet and Playgram
Assuming the 90 days trading horizon eMnet Inc is expected to generate 0.83 times more return on investment than Playgram. However, eMnet Inc is 1.2 times less risky than Playgram. It trades about -0.01 of its potential returns per unit of risk. Playgram Co is currently generating about -0.01 per unit of risk. If you would invest 415,248 in eMnet Inc on October 25, 2024 and sell it today you would lose (168,748) from holding eMnet Inc or give up 40.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
eMnet Inc vs. Playgram Co
Performance |
| Timeline |
| eMnet Inc |
| Playgram |
EMnet and Playgram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMnet and Playgram
The main advantage of trading using opposite EMnet and Playgram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMnet position performs unexpectedly, Playgram 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 Playgram will offset losses from the drop in Playgram's long position.| EMnet vs. Kisan Telecom Co | EMnet vs. Wireless Power Amplifier | EMnet vs. Nice Information Telecommunication | EMnet vs. ECSTELECOM Co |
| Playgram vs. LG Chemicals | Playgram vs. POSCO Holdings | Playgram vs. Hanwha Solutions | Playgram vs. Lotte Chemical Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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