Correlation Between Next Entertainment and KNOTUS CoLtd
Can any of the company-specific risk be diversified away by investing in both Next Entertainment and KNOTUS CoLtd 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 KNOTUS CoLtd 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 KNOTUS CoLtd, you can compare the effects of market volatilities on Next Entertainment and KNOTUS CoLtd 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 KNOTUS CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Entertainment and KNOTUS CoLtd.
Diversification Opportunities for Next Entertainment and KNOTUS CoLtd
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Next and KNOTUS is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Next Entertainment World and KNOTUS CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNOTUS CoLtd 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 KNOTUS CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNOTUS CoLtd has no effect on the direction of Next Entertainment i.e., Next Entertainment and KNOTUS CoLtd go up and down completely randomly.
Pair Corralation between Next Entertainment and KNOTUS CoLtd
Assuming the 90 days trading horizon Next Entertainment World is expected to generate 0.66 times more return on investment than KNOTUS CoLtd. However, Next Entertainment World is 1.53 times less risky than KNOTUS CoLtd. It trades about -0.07 of its potential returns per unit of risk. KNOTUS CoLtd is currently generating about -0.06 per unit of risk. If you would invest 328,000 in Next Entertainment World on September 3, 2024 and sell it today you would lose (93,500) from holding Next Entertainment World or give up 28.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Entertainment World vs. KNOTUS CoLtd
Performance |
| Timeline |
| Next Entertainment World |
| KNOTUS CoLtd |
Next Entertainment and KNOTUS CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Entertainment and KNOTUS CoLtd
The main advantage of trading using opposite Next Entertainment and KNOTUS CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Entertainment position performs unexpectedly, KNOTUS CoLtd 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 KNOTUS CoLtd will offset losses from the drop in KNOTUS CoLtd's long position.| Next Entertainment vs. Korea New Network | Next Entertainment vs. ICD Co | Next Entertainment vs. DYPNF CoLtd | Next Entertainment vs. Busan Industrial Co |
| KNOTUS CoLtd vs. Bridge Biotherapeutics | KNOTUS CoLtd vs. AptaBio Therapeutics | KNOTUS CoLtd vs. Cytogen | KNOTUS CoLtd vs. Genolution |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |