Correlation Between Woori Technology and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both Woori Technology 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 Woori Technology and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology and Cube Entertainment, you can compare the effects of market volatilities on Woori Technology 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 Woori Technology with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Cube Entertainment.
Diversification Opportunities for Woori Technology and Cube Entertainment
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Woori and Cube is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and Woori Technology 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 Woori Technology 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 Woori Technology i.e., Woori Technology and Cube Entertainment go up and down completely randomly.
Pair Corralation between Woori Technology and Cube Entertainment
Assuming the 90 days trading horizon Woori Technology is expected to under-perform the Cube Entertainment. In addition to that, Woori Technology is 1.14 times more volatile than Cube Entertainment. It trades about -0.34 of its total potential returns per unit of risk. Cube Entertainment is currently generating about -0.02 per unit of volatility. If you would invest 1,500,000 in Cube Entertainment on September 12, 2024 and sell it today you would lose (40,000) from holding Cube Entertainment or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology vs. Cube Entertainment
Performance |
| Timeline |
| Woori Technology |
| Cube Entertainment |
Woori Technology and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Cube Entertainment
The main advantage of trading using opposite Woori Technology and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology 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.| Woori Technology vs. Cube Entertainment | Woori Technology vs. Dreamus Company | Woori Technology vs. LG Energy Solution | Woori Technology vs. Dongwon System |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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