Correlation Between Next Entertainment and PNC Technologies
Can any of the company-specific risk be diversified away by investing in both Next Entertainment and PNC Technologies 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 Next Entertainment and PNC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Entertainment World and PNC Technologies co, you can compare the effects of market volatilities on Next Entertainment and PNC Technologies 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 Next Entertainment with a short position of PNC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Entertainment and PNC Technologies.
Diversification Opportunities for Next Entertainment and PNC Technologies
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Next and PNC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Next Entertainment World and PNC Technologies co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Technologies and Next 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 Next Entertainment World are associated (or correlated) with PNC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Technologies has no effect on the direction of Next Entertainment i.e., Next Entertainment and PNC Technologies go up and down completely randomly.
Pair Corralation between Next Entertainment and PNC Technologies
Assuming the 90 days trading horizon Next Entertainment World is expected to under-perform the PNC Technologies. In addition to that, Next Entertainment is 1.64 times more volatile than PNC Technologies co. It trades about 0.0 of its total potential returns per unit of risk. PNC Technologies co is currently generating about 0.13 per unit of volatility. If you would invest 410,500 in PNC Technologies co on November 3, 2024 and sell it today you would earn a total of 16,000 from holding PNC Technologies co or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Entertainment World vs. PNC Technologies co
Performance |
| Timeline |
| Next Entertainment World |
| PNC Technologies |
Next Entertainment and PNC Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Entertainment and PNC Technologies
The main advantage of trading using opposite Next Entertainment and PNC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Entertainment position performs unexpectedly, PNC Technologies 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 PNC Technologies will offset losses from the drop in PNC Technologies' long position.| Next Entertainment vs. LEENO Industrial | Next Entertainment vs. Pyung Hwa Industrial | Next Entertainment vs. Samhyun Steel Co | Next Entertainment vs. Lee Ku Industrial |
| PNC Technologies vs. NICE Information Service | PNC Technologies vs. Daewoo Electronic Components | PNC Technologies vs. Seoul Electronics Telecom | PNC Technologies vs. PJ Electronics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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