Correlation Between Pan International and Global Brands
Can any of the company-specific risk be diversified away by investing in both Pan International and Global Brands 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 International and Global Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan International Industrial Corp and Global Brands Manufacture, you can compare the effects of market volatilities on Pan International and Global Brands 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 International with a short position of Global Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan International and Global Brands.
Diversification Opportunities for Pan International and Global Brands
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pan and Global is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pan International Industrial C and Global Brands Manufacture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Brands Manufacture and Pan International 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 International Industrial Corp are associated (or correlated) with Global Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Brands Manufacture has no effect on the direction of Pan International i.e., Pan International and Global Brands go up and down completely randomly.
Pair Corralation between Pan International and Global Brands
Assuming the 90 days trading horizon Pan International Industrial Corp is expected to under-perform the Global Brands. In addition to that, Pan International is 1.66 times more volatile than Global Brands Manufacture. It trades about -0.17 of its total potential returns per unit of risk. Global Brands Manufacture is currently generating about -0.17 per unit of volatility. If you would invest 5,680 in Global Brands Manufacture on September 12, 2024 and sell it today you would lose (270.00) from holding Global Brands Manufacture or give up 4.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan International Industrial C vs. Global Brands Manufacture
Performance |
| Timeline |
| Pan International |
| Global Brands Manufacture |
Pan International and Global Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan International and Global Brands
The main advantage of trading using opposite Pan International and Global Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan International position performs unexpectedly, Global Brands 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 Global Brands will offset losses from the drop in Global Brands' long position.| Pan International vs. Hunya Foods Co | Pan International vs. Hi Lai Foods Co | Pan International vs. Sunspring Metal Corp | Pan International vs. Lian Hwa Foods |
| Global Brands vs. HannStar Board Corp | Global Brands vs. ITEQ Corp | Global Brands vs. Unitech Printed Circuit | Global Brands vs. Career Technology MFG |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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