Correlation Between Daedong Metals and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both Daedong Metals 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 Daedong Metals and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daedong Metals Co and Cube Entertainment, you can compare the effects of market volatilities on Daedong Metals 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 Daedong Metals with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daedong Metals and Cube Entertainment.
Diversification Opportunities for Daedong Metals and Cube Entertainment
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daedong and Cube is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Daedong Metals Co and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and Daedong Metals 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 Daedong Metals Co 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 Daedong Metals i.e., Daedong Metals and Cube Entertainment go up and down completely randomly.
Pair Corralation between Daedong Metals and Cube Entertainment
Assuming the 90 days trading horizon Daedong Metals Co is expected to generate 2.47 times more return on investment than Cube Entertainment. However, Daedong Metals is 2.47 times more volatile than Cube Entertainment. It trades about 0.14 of its potential returns per unit of risk. Cube Entertainment is currently generating about -0.02 per unit of risk. If you would invest 613,000 in Daedong Metals Co on September 12, 2024 and sell it today you would earn a total of 130,000 from holding Daedong Metals Co or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daedong Metals Co vs. Cube Entertainment
Performance |
| Timeline |
| Daedong Metals |
| Cube Entertainment |
Daedong Metals and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daedong Metals and Cube Entertainment
The main advantage of trading using opposite Daedong Metals and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daedong Metals 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.| Daedong Metals vs. Ecocab Co | Daedong Metals vs. Daedong Gear Co | Daedong Metals vs. Solution Advanced Technology | Daedong Metals vs. Busan Industrial Co |
| Cube Entertainment vs. Mobileleader CoLtd | Cube Entertainment vs. Dongwon Metal Co | Cube Entertainment vs. KT Submarine Telecom | Cube Entertainment vs. Hanjoo Light Metal |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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