Correlation Between Cube Entertainment and WooriNet
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and WooriNet 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 WooriNet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and WooriNet, you can compare the effects of market volatilities on Cube Entertainment and WooriNet 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 WooriNet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and WooriNet.
Diversification Opportunities for Cube Entertainment and WooriNet
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cube and WooriNet is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and WooriNet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WooriNet 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 WooriNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WooriNet has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and WooriNet go up and down completely randomly.
Pair Corralation between Cube Entertainment and WooriNet
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 0.37 times more return on investment than WooriNet. However, Cube Entertainment is 2.69 times less risky than WooriNet. It trades about -0.35 of its potential returns per unit of risk. WooriNet is currently generating about -0.24 per unit of risk. If you would invest 1,517,000 in Cube Entertainment on November 3, 2024 and sell it today you would lose (139,000) from holding Cube Entertainment or give up 9.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cube Entertainment vs. WooriNet
Performance |
| Timeline |
| Cube Entertainment |
| WooriNet |
Cube Entertainment and WooriNet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and WooriNet
The main advantage of trading using opposite Cube Entertainment and WooriNet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, WooriNet 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 WooriNet will offset losses from the drop in WooriNet's long position.| Cube Entertainment vs. Dongbu Insurance Co | Cube Entertainment vs. Shinsegae Food | Cube Entertainment vs. Samsung Life Insurance | Cube Entertainment vs. Haitai Confectionery Foods |
| WooriNet vs. Seojin System CoLtd | WooriNet vs. Ubiquoss Holdings | WooriNet vs. Asia Pacific Satellite | WooriNet vs. Mercury |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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