Correlation Between Soulbrain Holdings and AfreecaTV
Can any of the company-specific risk be diversified away by investing in both Soulbrain Holdings and AfreecaTV 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 Soulbrain Holdings and AfreecaTV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soulbrain Holdings Co and AfreecaTV Co, you can compare the effects of market volatilities on Soulbrain Holdings and AfreecaTV 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 Soulbrain Holdings with a short position of AfreecaTV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soulbrain Holdings and AfreecaTV.
Diversification Opportunities for Soulbrain Holdings and AfreecaTV
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Soulbrain and AfreecaTV is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Soulbrain Holdings Co and AfreecaTV Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfreecaTV and Soulbrain Holdings 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 Soulbrain Holdings Co are associated (or correlated) with AfreecaTV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfreecaTV has no effect on the direction of Soulbrain Holdings i.e., Soulbrain Holdings and AfreecaTV go up and down completely randomly.
Pair Corralation between Soulbrain Holdings and AfreecaTV
Assuming the 90 days trading horizon Soulbrain Holdings Co is expected to under-perform the AfreecaTV. In addition to that, Soulbrain Holdings is 1.09 times more volatile than AfreecaTV Co. It trades about -0.34 of its total potential returns per unit of risk. AfreecaTV Co is currently generating about 0.13 per unit of volatility. If you would invest 8,970,000 in AfreecaTV Co on August 25, 2024 and sell it today you would earn a total of 680,000 from holding AfreecaTV Co or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soulbrain Holdings Co vs. AfreecaTV Co
Performance |
| Timeline |
| Soulbrain Holdings |
| AfreecaTV |
Soulbrain Holdings and AfreecaTV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soulbrain Holdings and AfreecaTV
The main advantage of trading using opposite Soulbrain Holdings and AfreecaTV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soulbrain Holdings position performs unexpectedly, AfreecaTV 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 AfreecaTV will offset losses from the drop in AfreecaTV's long position.| Soulbrain Holdings vs. LG Chemicals | Soulbrain Holdings vs. POSCO Holdings | Soulbrain Holdings vs. Lotte Chemical Corp | Soulbrain Holdings vs. Hyundai Steel |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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