Correlation Between Cube Entertainment and Daewon Media
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and Daewon 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 Cube Entertainment and Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and Daewon Media Co, you can compare the effects of market volatilities on Cube Entertainment and Daewon 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 Cube Entertainment with a short position of Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and Daewon Media.
Diversification Opportunities for Cube Entertainment and Daewon Media
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cube and Daewon is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media 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 Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and Daewon Media go up and down completely randomly.
Pair Corralation between Cube Entertainment and Daewon Media
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 1.48 times more return on investment than Daewon Media. However, Cube Entertainment is 1.48 times more volatile than Daewon Media Co. It trades about 0.04 of its potential returns per unit of risk. Daewon Media Co is currently generating about 0.02 per unit of risk. If you would invest 1,300,000 in Cube Entertainment on October 18, 2024 and sell it today you would earn a total of 138,000 from holding Cube Entertainment or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cube Entertainment vs. Daewon Media Co
Performance |
| Timeline |
| Cube Entertainment |
| Daewon Media |
Cube Entertainment and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and Daewon Media
The main advantage of trading using opposite Cube Entertainment and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, Daewon 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 Daewon Media will offset losses from the drop in Daewon Media's long position.| Cube Entertainment vs. SCI Information Service | Cube Entertainment vs. Okins Electronics Co | Cube Entertainment vs. Koryo Credit Information | Cube Entertainment vs. Daishin Information Communications |
| Daewon Media vs. SAMG Entertainment Co | Daewon Media vs. Genie Music | Daewon Media vs. Cube Entertainment | Daewon Media vs. SM Entertainment 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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