Correlation Between Kaonmedia and Next Entertainment
Can any of the company-specific risk be diversified away by investing in both Kaonmedia and Next 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 Kaonmedia and Next Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaonmedia Co and Next Entertainment World, you can compare the effects of market volatilities on Kaonmedia and Next 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 Kaonmedia with a short position of Next Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaonmedia and Next Entertainment.
Diversification Opportunities for Kaonmedia and Next Entertainment
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kaonmedia and Next is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kaonmedia Co and Next Entertainment World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Entertainment World and Kaonmedia 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 Kaonmedia Co are associated (or correlated) with Next Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Entertainment World has no effect on the direction of Kaonmedia i.e., Kaonmedia and Next Entertainment go up and down completely randomly.
Pair Corralation between Kaonmedia and Next Entertainment
Assuming the 90 days trading horizon Kaonmedia Co is expected to generate 1.32 times more return on investment than Next Entertainment. However, Kaonmedia is 1.32 times more volatile than Next Entertainment World. It trades about -0.02 of its potential returns per unit of risk. Next Entertainment World is currently generating about -0.12 per unit of risk. If you would invest 568,920 in Kaonmedia Co on August 25, 2024 and sell it today you would lose (233,920) from holding Kaonmedia Co or give up 41.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaonmedia Co vs. Next Entertainment World
Performance |
| Timeline |
| Kaonmedia |
| Next Entertainment World |
Kaonmedia and Next Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaonmedia and Next Entertainment
The main advantage of trading using opposite Kaonmedia and Next Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaonmedia position performs unexpectedly, Next 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 Next Entertainment will offset losses from the drop in Next Entertainment's long position.| Kaonmedia vs. Korea Real Estate | Kaonmedia vs. Korea Ratings Co | Kaonmedia vs. IQuest Co | Kaonmedia vs. Wonbang Tech Co |
| Next Entertainment vs. Daou Data Corp | Next Entertainment vs. Wireless Power Amplifier | Next Entertainment vs. Tway Air Co | Next Entertainment vs. Korean Air Lines |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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