Correlation Between Daejung Chemicals and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals 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 Daejung Chemicals and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daejung Chemicals Metals and Cube Entertainment, you can compare the effects of market volatilities on Daejung Chemicals 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 Daejung Chemicals with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and Cube Entertainment.
Diversification Opportunities for Daejung Chemicals and Cube Entertainment
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daejung and Cube is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and Daejung Chemicals 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 Daejung Chemicals Metals 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 Daejung Chemicals i.e., Daejung Chemicals and Cube Entertainment go up and down completely randomly.
Pair Corralation between Daejung Chemicals and Cube Entertainment
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to under-perform the Cube Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Daejung Chemicals Metals is 1.98 times less risky than Cube Entertainment. The stock trades about -0.05 of its potential returns per unit of risk. The Cube Entertainment is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,978,000 in Cube Entertainment on November 9, 2024 and sell it today you would lose (482,000) from holding Cube Entertainment or give up 24.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. Cube Entertainment
Performance |
| Timeline |
| Daejung Chemicals Metals |
| Cube Entertainment |
Daejung Chemicals and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and Cube Entertainment
The main advantage of trading using opposite Daejung Chemicals and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals 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.| Daejung Chemicals vs. Sung Bo Chemicals | Daejung Chemicals vs. SK Chemicals Co | Daejung Chemicals vs. Kukil Metal Co | Daejung Chemicals vs. Homecast CoLtd |
| Cube Entertainment vs. Display Tech Co | Cube Entertainment vs. ECSTELECOM Co | Cube Entertainment vs. Inzi Display CoLtd | Cube Entertainment vs. SK Telecom 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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