Correlation Between Mobase Electronics and Next Entertainment
Can any of the company-specific risk be diversified away by investing in both Mobase Electronics and Next 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 Mobase Electronics and Next Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobase Electronics CoLtd and Next Entertainment World, you can compare the effects of market volatilities on Mobase Electronics and Next 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 Mobase Electronics with a short position of Next Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobase Electronics and Next Entertainment.
Diversification Opportunities for Mobase Electronics and Next Entertainment
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mobase and Next is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mobase Electronics CoLtd and Next Entertainment World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Entertainment World and Mobase Electronics 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 Mobase Electronics CoLtd are associated (or correlated) with Next Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Entertainment World has no effect on the direction of Mobase Electronics i.e., Mobase Electronics and Next Entertainment go up and down completely randomly.
Pair Corralation between Mobase Electronics and Next Entertainment
Assuming the 90 days trading horizon Mobase Electronics CoLtd is expected to generate 0.61 times more return on investment than Next Entertainment. However, Mobase Electronics CoLtd is 1.64 times less risky than Next Entertainment. It trades about -0.1 of its potential returns per unit of risk. Next Entertainment World is currently generating about -0.11 per unit of risk. If you would invest 144,300 in Mobase Electronics CoLtd on November 5, 2024 and sell it today you would lose (4,100) from holding Mobase Electronics CoLtd or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobase Electronics CoLtd vs. Next Entertainment World
Performance |
| Timeline |
| Mobase Electronics CoLtd |
| Next Entertainment World |
Mobase Electronics and Next Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobase Electronics and Next Entertainment
The main advantage of trading using opposite Mobase Electronics and Next Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobase Electronics position performs unexpectedly, Next 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 Next Entertainment will offset losses from the drop in Next Entertainment's long position.| Mobase Electronics vs. Korea Information Communications | Mobase Electronics vs. FNSTech Co | Mobase Electronics vs. Kisan Telecom Co | Mobase Electronics vs. Ssangyong Information Communication |
| Next Entertainment vs. Solus Advanced Materials | Next Entertainment vs. Hanjoo Light Metal | Next Entertainment vs. LG Chemicals | Next Entertainment vs. Top Material 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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