Correlation Between Hancom and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both Hancom 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 Hancom and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hancom Inc and Cube Entertainment, you can compare the effects of market volatilities on Hancom 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 Hancom with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hancom and Cube Entertainment.
Diversification Opportunities for Hancom and Cube Entertainment
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hancom and Cube is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hancom Inc and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and Hancom 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 Hancom Inc 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 Hancom i.e., Hancom and Cube Entertainment go up and down completely randomly.
Pair Corralation between Hancom and Cube Entertainment
Assuming the 90 days trading horizon Hancom Inc is expected to generate 1.57 times more return on investment than Cube Entertainment. However, Hancom is 1.57 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 0.12 per unit of risk. If you would invest 1,929,000 in Hancom Inc on September 13, 2024 and sell it today you would earn a total of 296,000 from holding Hancom Inc or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hancom Inc vs. Cube Entertainment
Performance |
| Timeline |
| Hancom Inc |
| Cube Entertainment |
Hancom and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hancom and Cube Entertainment
The main advantage of trading using opposite Hancom and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hancom 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.| Hancom vs. Cube Entertainment | Hancom vs. Dreamus Company | Hancom vs. LG Energy Solution | Hancom vs. Dongwon System |
| Cube Entertainment vs. Daishin Information Communications | Cube Entertainment vs. CG Hi Tech | Cube Entertainment vs. Samyoung Electronics Co | Cube Entertainment vs. Derkwoo Electronics 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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