Correlation Between YG Entertainment and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both YG Entertainment 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 YG Entertainment and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YG Entertainment and Cube Entertainment, you can compare the effects of market volatilities on YG Entertainment 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 YG Entertainment with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of YG Entertainment and Cube Entertainment.
Diversification Opportunities for YG Entertainment and Cube Entertainment
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 122870 and Cube is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding YG Entertainment and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and YG Entertainment 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 YG Entertainment 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 YG Entertainment i.e., YG Entertainment and Cube Entertainment go up and down completely randomly.
Pair Corralation between YG Entertainment and Cube Entertainment
Assuming the 90 days trading horizon YG Entertainment is expected to under-perform the Cube Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, YG Entertainment is 1.04 times less risky than Cube Entertainment. The stock trades about -0.04 of its potential returns per unit of risk. The Cube Entertainment is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,145,000 in Cube Entertainment on September 2, 2024 and sell it today you would lose (507,000) from holding Cube Entertainment or give up 23.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YG Entertainment vs. Cube Entertainment
Performance |
| Timeline |
| YG Entertainment |
| Cube Entertainment |
YG Entertainment and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YG Entertainment and Cube Entertainment
The main advantage of trading using opposite YG Entertainment and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YG Entertainment 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.| YG Entertainment vs. JYP Entertainment | YG Entertainment vs. SM Entertainment Co | YG Entertainment vs. Cube Entertainment | YG Entertainment vs. FNC Entertainment Co |
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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.
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