Correlation Between Kbi Metal and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both Kbi Metal 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 Kbi Metal and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and Cube Entertainment, you can compare the effects of market volatilities on Kbi Metal 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 Kbi Metal with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Cube Entertainment.
Diversification Opportunities for Kbi Metal and Cube Entertainment
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kbi and Cube is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and Kbi Metal 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 Kbi Metal 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 Kbi Metal i.e., Kbi Metal and Cube Entertainment go up and down completely randomly.
Pair Corralation between Kbi Metal and Cube Entertainment
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the Cube Entertainment. In addition to that, Kbi Metal is 1.4 times more volatile than Cube Entertainment. It trades about -0.14 of its total potential returns per unit of risk. Cube Entertainment is currently generating about 0.12 per unit of volatility. If you would invest 1,398,000 in Cube Entertainment on September 4, 2024 and sell it today you would earn a total of 267,000 from holding Cube Entertainment or generate 19.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kbi Metal Co vs. Cube Entertainment
Performance |
| Timeline |
| Kbi Metal |
| Cube Entertainment |
Kbi Metal and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kbi Metal and Cube Entertainment
The main advantage of trading using opposite Kbi Metal and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal 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.| Kbi Metal vs. Korea Real Estate | Kbi Metal vs. Busan Industrial Co | Kbi Metal vs. UNISEM Co | Kbi Metal vs. RPBio Inc |
| Cube Entertainment vs. SK Chemicals Co | Cube Entertainment vs. Sung Bo Chemicals | Cube Entertainment vs. Daedong Metals Co | Cube Entertainment vs. Kbi Metal 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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