Correlation Between Pan Entertainment and Nh Investment

Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and Nh Investment 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 Entertainment and Nh Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pan Entertainment Co and Nh Investment And, you can compare the effects of market volatilities on Pan Entertainment and Nh Investment 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 Entertainment with a short position of Nh Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and Nh Investment.

Diversification Opportunities for Pan Entertainment and Nh Investment

0.73

Correlation Coefficient

Pan Entertainment  Nh Investment

Poor diversification

The 3 months correlation between Pan and 005945 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and Nh Investment And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nh Investment And and Pan 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 Pan Entertainment Co are associated (or correlated) with Nh Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nh Investment And has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and Nh Investment go up and down completely randomly.

Pair Corralation between Pan Entertainment and Nh Investment

Assuming the 90 days trading horizon Pan Entertainment Co is expected to generate 7.3 times more return on investment than Nh Investment. However, Pan Entertainment is 7.3 times more volatile than Nh Investment And. It trades about 0.15 of its potential returns per unit of risk. Nh Investment And is currently generating about 0.19 per unit of risk. If you would invest  219,000  in Pan Entertainment Co on December 23, 2024 and sell it today you would earn a total of  90,000  from holding Pan Entertainment Co or generate 41.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Pan Entertainment Co  vs.  Nh Investment And

Pan Entertainment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pan Entertainment Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Pan Entertainment sustained solid returns over the last few months and may actually be approaching a breakup point.

Nh Investment And

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nh Investment And are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nh Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Pan Entertainment and Nh Investment

The main advantage of trading using opposite Pan Entertainment and Nh Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, Nh Investment 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 Nh Investment will offset losses from the drop in Nh Investment's long position.

The idea behind Pan Entertainment Co and Nh Investment And pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.