Correlation Between Korea Petro and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both Korea Petro 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 Korea Petro and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Petro Chemical and Cube Entertainment, you can compare the effects of market volatilities on Korea Petro 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 Korea Petro with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Petro and Cube Entertainment.
Diversification Opportunities for Korea Petro and Cube Entertainment
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korea and Cube is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Korea Petro Chemical and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and Korea Petro 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 Korea Petro Chemical 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 Korea Petro i.e., Korea Petro and Cube Entertainment go up and down completely randomly.
Pair Corralation between Korea Petro and Cube Entertainment
Assuming the 90 days trading horizon Korea Petro Chemical is expected to generate 1.89 times more return on investment than Cube Entertainment. However, Korea Petro is 1.89 times more volatile than Cube Entertainment. It trades about 0.12 of its potential returns per unit of risk. Cube Entertainment is currently generating about -0.29 per unit of risk. If you would invest 8,370,000 in Korea Petro Chemical on November 7, 2024 and sell it today you would earn a total of 470,000 from holding Korea Petro Chemical or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Korea Petro Chemical vs. Cube Entertainment
Performance |
| Timeline |
| Korea Petro Chemical |
| Cube Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Korea Petro and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Petro and Cube Entertainment
The main advantage of trading using opposite Korea Petro and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Petro 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.| Korea Petro vs. Tamul Multimedia Co | Korea Petro vs. Dongwoon Anatech Co | Korea Petro vs. Wonbang Tech Co | Korea Petro vs. Kaonmedia 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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