Correlation Between WONIK Materials and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both WONIK Materials 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 WONIK Materials and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WONIK Materials CoLtd and Cube Entertainment, you can compare the effects of market volatilities on WONIK Materials 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 WONIK Materials with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of WONIK Materials and Cube Entertainment.
Diversification Opportunities for WONIK Materials and Cube Entertainment
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WONIK and Cube is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding WONIK Materials CoLtd and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and WONIK Materials 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 WONIK Materials CoLtd 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 WONIK Materials i.e., WONIK Materials and Cube Entertainment go up and down completely randomly.
Pair Corralation between WONIK Materials and Cube Entertainment
Assuming the 90 days trading horizon WONIK Materials is expected to generate 9.56 times less return on investment than Cube Entertainment. But when comparing it to its historical volatility, WONIK Materials CoLtd is 1.5 times less risky than Cube Entertainment. It trades about 0.02 of its potential returns per unit of risk. Cube Entertainment is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,490,000 in Cube Entertainment on September 19, 2024 and sell it today you would earn a total of 166,000 from holding Cube Entertainment or generate 11.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WONIK Materials CoLtd vs. Cube Entertainment
Performance |
| Timeline |
| WONIK Materials CoLtd |
| Cube Entertainment |
WONIK Materials and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WONIK Materials and Cube Entertainment
The main advantage of trading using opposite WONIK Materials and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WONIK Materials 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.| WONIK Materials vs. LG Chemicals | WONIK Materials vs. POSCO Holdings | WONIK Materials vs. Hanwha Solutions | WONIK Materials vs. Lotte Chemical Corp |
| Cube Entertainment vs. WONIK Materials CoLtd | Cube Entertainment vs. Lotte Energy Materials | Cube Entertainment vs. PI Advanced Materials | Cube Entertainment vs. Phoenix Materials 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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