Correlation Between Cube Entertainment and KEYEASTCoLtd
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and KEYEASTCoLtd 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 KEYEASTCoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and KEYEASTCoLtd, you can compare the effects of market volatilities on Cube Entertainment and KEYEASTCoLtd 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 KEYEASTCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and KEYEASTCoLtd.
Diversification Opportunities for Cube Entertainment and KEYEASTCoLtd
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cube and KEYEASTCoLtd is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and KEYEASTCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYEASTCoLtd 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 KEYEASTCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEYEASTCoLtd has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and KEYEASTCoLtd go up and down completely randomly.
Pair Corralation between Cube Entertainment and KEYEASTCoLtd
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 1.3 times more return on investment than KEYEASTCoLtd. However, Cube Entertainment is 1.3 times more volatile than KEYEASTCoLtd. It trades about 0.25 of its potential returns per unit of risk. KEYEASTCoLtd is currently generating about 0.08 per unit of risk. If you would invest 1,360,000 in Cube Entertainment on August 28, 2024 and sell it today you would earn a total of 220,000 from holding Cube Entertainment or generate 16.18% 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. KEYEASTCoLtd
Performance |
| Timeline |
| Cube Entertainment |
| KEYEASTCoLtd |
Cube Entertainment and KEYEASTCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and KEYEASTCoLtd
The main advantage of trading using opposite Cube Entertainment and KEYEASTCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, KEYEASTCoLtd 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 KEYEASTCoLtd will offset losses from the drop in KEYEASTCoLtd's 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 |
| KEYEASTCoLtd vs. AfreecaTV Co | KEYEASTCoLtd vs. SS TECH | KEYEASTCoLtd vs. Busan Industrial Co | KEYEASTCoLtd vs. Busan Ind |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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