Correlation Between Dongbang Transport and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport and Cube Entertainment 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 Dongbang Transport and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Transport Logistics and Cube Entertainment, you can compare the effects of market volatilities on Dongbang Transport and Cube Entertainment 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 Dongbang Transport with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Cube Entertainment.
Diversification Opportunities for Dongbang Transport and Cube Entertainment
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongbang and Cube is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and Dongbang Transport 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 Dongbang Transport Logistics are associated (or correlated) with Cube Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cube Entertainment has no effect on the direction of Dongbang Transport i.e., Dongbang Transport and Cube Entertainment go up and down completely randomly.
Pair Corralation between Dongbang Transport and Cube Entertainment
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to generate 0.99 times more return on investment than Cube Entertainment. However, Dongbang Transport Logistics is 1.01 times less risky than Cube Entertainment. It trades about -0.25 of its potential returns per unit of risk. Cube Entertainment is currently generating about -0.29 per unit of risk. If you would invest 224,500 in Dongbang Transport Logistics on November 7, 2024 and sell it today you would lose (14,500) from holding Dongbang Transport Logistics or give up 6.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Cube Entertainment
Performance |
| Timeline |
| Dongbang Transport |
| Cube Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dongbang Transport and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Cube Entertainment
The main advantage of trading using opposite Dongbang Transport and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport position performs unexpectedly, Cube Entertainment 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 Cube Entertainment will offset losses from the drop in Cube Entertainment's long position.| Dongbang Transport vs. Daewoo SBI SPAC | Dongbang Transport vs. Jahwa Electron | Dongbang Transport vs. Wonbang Tech Co |
| Cube Entertainment vs. Pan Entertainment Co | Cube Entertainment vs. Neungyule Education | Cube Entertainment vs. INNOX Advanced Materials | Cube Entertainment vs. Seoul Semiconductor Co |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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