Correlation Between Korea Computer and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both Korea Computer 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 Korea Computer and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer and Cube Entertainment, you can compare the effects of market volatilities on Korea Computer 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 Korea Computer with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and Cube Entertainment.
Diversification Opportunities for Korea Computer and Cube Entertainment
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Korea and Cube is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and Korea Computer 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 Korea Computer 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 Korea Computer i.e., Korea Computer and Cube Entertainment go up and down completely randomly.
Pair Corralation between Korea Computer and Cube Entertainment
Assuming the 90 days trading horizon Korea Computer is expected to generate 1.25 times more return on investment than Cube Entertainment. However, Korea Computer is 1.25 times more volatile than Cube Entertainment. It trades about 0.0 of its potential returns per unit of risk. Cube Entertainment is currently generating about -0.59 per unit of risk. If you would invest 502,390 in Korea Computer on October 16, 2024 and sell it today you would lose (2,890) from holding Korea Computer or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Computer vs. Cube Entertainment
Performance |
| Timeline |
| Korea Computer |
| Cube Entertainment |
Korea Computer and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and Cube Entertainment
The main advantage of trading using opposite Korea Computer and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer 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.| Korea Computer vs. Hankuk Steel Wire | Korea Computer vs. Fine Besteel Co | Korea Computer vs. PLAYWITH | Korea Computer vs. Alton Sports CoLtd |
| Cube Entertainment vs. Daesung Hi Tech Co | Cube Entertainment vs. KB Financial Group | Cube Entertainment vs. Nice Information Telecommunication | Cube Entertainment vs. Korea Computer |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |