Correlation Between Pan Entertainment and FarmStory
Can any of the company-specific risk be diversified away by investing in both Pan Entertainment and FarmStory 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 FarmStory 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 FarmStory Co, you can compare the effects of market volatilities on Pan Entertainment and FarmStory 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 FarmStory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Entertainment and FarmStory.
Diversification Opportunities for Pan Entertainment and FarmStory
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pan and FarmStory is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Pan Entertainment Co and FarmStory Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FarmStory 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 FarmStory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FarmStory has no effect on the direction of Pan Entertainment i.e., Pan Entertainment and FarmStory go up and down completely randomly.
Pair Corralation between Pan Entertainment and FarmStory
Assuming the 90 days trading horizon Pan Entertainment Co is expected to generate 0.93 times more return on investment than FarmStory. However, Pan Entertainment Co is 1.07 times less risky than FarmStory. It trades about -0.03 of its potential returns per unit of risk. FarmStory Co is currently generating about -0.17 per unit of risk. If you would invest 206,500 in Pan Entertainment Co on September 10, 2024 and sell it today you would lose (6,500) from holding Pan Entertainment Co or give up 3.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pan Entertainment Co vs. FarmStory Co
Performance |
Timeline |
Pan Entertainment |
FarmStory |
Pan Entertainment and FarmStory Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pan Entertainment and FarmStory
The main advantage of trading using opposite Pan Entertainment and FarmStory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Entertainment position performs unexpectedly, FarmStory 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 FarmStory will offset losses from the drop in FarmStory's long position.Pan Entertainment vs. Jeju Bank | Pan Entertainment vs. BNK Financial Group | Pan Entertainment vs. Samsung Life Insurance | Pan Entertainment vs. RF Materials Co |
FarmStory vs. Sungmoon Electronics Co | FarmStory vs. Sangshin Electronics Co | FarmStory vs. iNtRON Biotechnology | FarmStory vs. Seoul Food Industrial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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