Correlation Between Hyosung Advanced and Pan Entertainment
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and Pan Entertainment 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 Hyosung Advanced and Pan Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Advanced Materials and Pan Entertainment Co, you can compare the effects of market volatilities on Hyosung Advanced and Pan Entertainment 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 Hyosung Advanced with a short position of Pan Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and Pan Entertainment.
Diversification Opportunities for Hyosung Advanced and Pan Entertainment
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyosung and Pan is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and Pan Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Entertainment and Hyosung Advanced 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 Hyosung Advanced Materials are associated (or correlated) with Pan Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Entertainment has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and Pan Entertainment go up and down completely randomly.
Pair Corralation between Hyosung Advanced and Pan Entertainment
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to under-perform the Pan Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Hyosung Advanced Materials is 1.02 times less risky than Pan Entertainment. The stock trades about -0.06 of its potential returns per unit of risk. The Pan Entertainment Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 576,000 in Pan Entertainment Co on October 26, 2024 and sell it today you would lose (322,500) from holding Pan Entertainment Co or give up 55.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyosung Advanced Materials vs. Pan Entertainment Co
Performance |
| Timeline |
| Hyosung Advanced Mat |
| Pan Entertainment |
Hyosung Advanced and Pan Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Advanced and Pan Entertainment
The main advantage of trading using opposite Hyosung Advanced and Pan Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, Pan Entertainment 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 Pan Entertainment will offset losses from the drop in Pan Entertainment's long position.| Hyosung Advanced vs. Camus Engineering Construction | Hyosung Advanced vs. Hanshin Construction Co | Hyosung Advanced vs. GS Engineering Construction | Hyosung Advanced vs. ENERGYMACHINERY KOREA CoLtd |
| Pan Entertainment vs. Busan Industrial Co | Pan Entertainment vs. Busan Ind | Pan Entertainment vs. RPBio Inc | Pan Entertainment vs. Finebesteel |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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