Correlation Between Cube Entertainment and Iljin Materials
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and Iljin Materials 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 Cube Entertainment and Iljin Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and Iljin Materials Co, you can compare the effects of market volatilities on Cube Entertainment and Iljin Materials 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 Cube Entertainment with a short position of Iljin Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and Iljin Materials.
Diversification Opportunities for Cube Entertainment and Iljin Materials
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cube and Iljin is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and Iljin Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Materials and Cube 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 Cube Entertainment are associated (or correlated) with Iljin Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin Materials has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and Iljin Materials go up and down completely randomly.
Pair Corralation between Cube Entertainment and Iljin Materials
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 0.96 times more return on investment than Iljin Materials. However, Cube Entertainment is 1.04 times less risky than Iljin Materials. It trades about -0.01 of its potential returns per unit of risk. Iljin Materials Co is currently generating about -0.06 per unit of risk. If you would invest 1,936,000 in Cube Entertainment on September 12, 2024 and sell it today you would lose (476,000) from holding Cube Entertainment or give up 24.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cube Entertainment vs. Iljin Materials Co
Performance |
| Timeline |
| Cube Entertainment |
| Iljin Materials |
Cube Entertainment and Iljin Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and Iljin Materials
The main advantage of trading using opposite Cube Entertainment and Iljin Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, Iljin Materials 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 Iljin Materials will offset losses from the drop in Iljin Materials' long position.| Cube Entertainment vs. Samsung Electronics Co | Cube Entertainment vs. Samsung Electronics Co | Cube Entertainment vs. LG Energy Solution | Cube Entertainment vs. SK Hynix |
| Iljin Materials vs. Samsung Electronics Co | Iljin Materials vs. Samsung Electronics Co | Iljin Materials vs. LG Energy Solution | Iljin Materials vs. SK Hynix |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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