Correlation Between EJF Investments and Panasonic Corp
Can any of the company-specific risk be diversified away by investing in both EJF Investments and Panasonic Corp 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 EJF Investments and Panasonic Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EJF Investments and Panasonic Corp, you can compare the effects of market volatilities on EJF Investments and Panasonic Corp 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 EJF Investments with a short position of Panasonic Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of EJF Investments and Panasonic Corp.
Diversification Opportunities for EJF Investments and Panasonic Corp
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EJF and Panasonic is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding EJF Investments and Panasonic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panasonic Corp and EJF Investments 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 EJF Investments are associated (or correlated) with Panasonic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panasonic Corp has no effect on the direction of EJF Investments i.e., EJF Investments and Panasonic Corp go up and down completely randomly.
Pair Corralation between EJF Investments and Panasonic Corp
Assuming the 90 days trading horizon EJF Investments is expected to generate 13.23 times less return on investment than Panasonic Corp. But when comparing it to its historical volatility, EJF Investments is 1.4 times less risky than Panasonic Corp. It trades about 0.01 of its potential returns per unit of risk. Panasonic Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 109,407 in Panasonic Corp on October 30, 2024 and sell it today you would earn a total of 42,543 from holding Panasonic Corp or generate 38.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 86.52% |
| Values | Daily Returns |
EJF Investments vs. Panasonic Corp
Performance |
| Timeline |
| EJF Investments |
| Panasonic Corp |
EJF Investments and Panasonic Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EJF Investments and Panasonic Corp
The main advantage of trading using opposite EJF Investments and Panasonic Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EJF Investments position performs unexpectedly, Panasonic Corp 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 Panasonic Corp will offset losses from the drop in Panasonic Corp's long position.| EJF Investments vs. SupplyMe Capital PLC | EJF Investments vs. Premier African Minerals | EJF Investments vs. SANTANDER UK 8 | EJF Investments vs. Tower Resources plc |
| Panasonic Corp vs. Zoom Video Communications | Panasonic Corp vs. Zegona Communications Plc | Panasonic Corp vs. Fonix Mobile plc | Panasonic Corp vs. Seche Environnement SA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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