Correlation Between Next Entertainment and KIWI Media
Can any of the company-specific risk be diversified away by investing in both Next Entertainment and KIWI Media 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 Next Entertainment and KIWI Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Entertainment World and KIWI Media Group, you can compare the effects of market volatilities on Next Entertainment and KIWI Media 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 Next Entertainment with a short position of KIWI Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Entertainment and KIWI Media.
Diversification Opportunities for Next Entertainment and KIWI Media
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Next and KIWI is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Next Entertainment World and KIWI Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIWI Media Group and Next 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 Next Entertainment World are associated (or correlated) with KIWI Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIWI Media Group has no effect on the direction of Next Entertainment i.e., Next Entertainment and KIWI Media go up and down completely randomly.
Pair Corralation between Next Entertainment and KIWI Media
Assuming the 90 days trading horizon Next Entertainment World is expected to generate 0.66 times more return on investment than KIWI Media. However, Next Entertainment World is 1.52 times less risky than KIWI Media. It trades about -0.08 of its potential returns per unit of risk. KIWI Media Group is currently generating about -0.13 per unit of risk. If you would invest 323,500 in Next Entertainment World on August 25, 2024 and sell it today you would lose (97,000) from holding Next Entertainment World or give up 29.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Entertainment World vs. KIWI Media Group
Performance |
| Timeline |
| Next Entertainment World |
| KIWI Media Group |
Next Entertainment and KIWI Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Entertainment and KIWI Media
The main advantage of trading using opposite Next Entertainment and KIWI Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Entertainment position performs unexpectedly, KIWI Media 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 KIWI Media will offset losses from the drop in KIWI Media's long position.| Next Entertainment vs. ChipsMedia | Next Entertainment vs. Haesung Industrial Co | Next Entertainment vs. Busan Industrial Co | Next Entertainment vs. Visang Education |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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