Correlation Between Panasonic Corp and PPHE Hotel
Can any of the company-specific risk be diversified away by investing in both Panasonic Corp and PPHE Hotel 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 Panasonic Corp and PPHE Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panasonic Corp and PPHE Hotel Group, you can compare the effects of market volatilities on Panasonic Corp and PPHE Hotel 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 Panasonic Corp with a short position of PPHE Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panasonic Corp and PPHE Hotel.
Diversification Opportunities for Panasonic Corp and PPHE Hotel
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Panasonic and PPHE is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Panasonic Corp and PPHE Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE Hotel Group and Panasonic Corp 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 Panasonic Corp are associated (or correlated) with PPHE Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE Hotel Group has no effect on the direction of Panasonic Corp i.e., Panasonic Corp and PPHE Hotel go up and down completely randomly.
Pair Corralation between Panasonic Corp and PPHE Hotel
Assuming the 90 days trading horizon Panasonic Corp is expected to generate 2.81 times less return on investment than PPHE Hotel. In addition to that, Panasonic Corp is 1.11 times more volatile than PPHE Hotel Group. It trades about 0.1 of its total potential returns per unit of risk. PPHE Hotel Group is currently generating about 0.31 per unit of volatility. If you would invest 116,000 in PPHE Hotel Group on September 20, 2024 and sell it today you would earn a total of 16,500 from holding PPHE Hotel Group or generate 14.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 50.0% |
Values | Daily Returns |
Panasonic Corp vs. PPHE Hotel Group
Performance |
Timeline |
Panasonic Corp |
PPHE Hotel Group |
Panasonic Corp and PPHE Hotel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Panasonic Corp and PPHE Hotel
The main advantage of trading using opposite Panasonic Corp and PPHE Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panasonic Corp position performs unexpectedly, PPHE Hotel 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 PPHE Hotel will offset losses from the drop in PPHE Hotel's long position.Panasonic Corp vs. PPHE Hotel Group | Panasonic Corp vs. AfriTin Mining | Panasonic Corp vs. Panther Metals PLC | Panasonic Corp vs. SBM Offshore NV |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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