Correlation Between Episil Holding and Pan Jit

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

By analyzing existing cross correlation between Episil Holding and Pan Jit International, you can compare the effects of market volatilities on Episil Holding and Pan Jit 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 Episil Holding with a short position of Pan Jit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Episil Holding and Pan Jit.

Diversification Opportunities for Episil Holding and Pan Jit

0.79

Correlation Coefficient

Episil Holding  Pan Jit

Poor diversification

The 3 months correlation between Episil and Pan is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Episil Holding and Pan Jit International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Jit International and Episil Holding 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 Episil Holding are associated (or correlated) with Pan Jit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Jit International has no effect on the direction of Episil Holding i.e., Episil Holding and Pan Jit go up and down completely randomly.

Pair Corralation between Episil Holding and Pan Jit

Assuming the 90 days trading horizon Episil Holding is expected to generate 3.1 times more return on investment than Pan Jit. However, Episil Holding is 3.1 times more volatile than Pan Jit International. It trades about -0.04 of its potential returns per unit of risk. Pan Jit International is currently generating about -0.19 per unit of risk. If you would invest  4,590  in Episil Holding on October 24, 2024 and sell it today you would lose (215.00) from holding Episil Holding or give up 4.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Episil Holding  vs.  Pan Jit International

Episil Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Episil Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pan Jit International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pan Jit International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Episil Holding and Pan Jit

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

The idea behind Episil Holding and Pan Jit International 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.