Correlation Between UIL and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both UIL 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 UIL and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UIL Co and Cube Entertainment, you can compare the effects of market volatilities on UIL 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 UIL with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of UIL and Cube Entertainment.
Diversification Opportunities for UIL and Cube Entertainment
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UIL and Cube is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding UIL Co and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and UIL 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 UIL 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 UIL i.e., UIL and Cube Entertainment go up and down completely randomly.
Pair Corralation between UIL and Cube Entertainment
Assuming the 90 days trading horizon UIL is expected to generate 2.95 times less return on investment than Cube Entertainment. In addition to that, UIL is 1.04 times more volatile than Cube Entertainment. It trades about 0.07 of its total potential returns per unit of risk. Cube Entertainment is currently generating about 0.22 per unit of volatility. If you would invest 1,392,000 in Cube Entertainment on September 14, 2024 and sell it today you would earn a total of 251,000 from holding Cube Entertainment or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
UIL Co vs. Cube Entertainment
Performance |
| Timeline |
| UIL Co |
| Cube Entertainment |
UIL and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UIL and Cube Entertainment
The main advantage of trading using opposite UIL and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UIL 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.The idea behind UIL Co and Cube Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Cube Entertainment vs. PlayD Co | Cube Entertainment vs. Neungyule Education | Cube Entertainment vs. Solution Advanced Technology | Cube Entertainment vs. Busan Industrial 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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