Correlation Between Cube Entertainment and Dongwon System
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and Dongwon System 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 Dongwon System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and Dongwon System, you can compare the effects of market volatilities on Cube Entertainment and Dongwon System 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 Dongwon System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and Dongwon System.
Diversification Opportunities for Cube Entertainment and Dongwon System
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cube and Dongwon is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and Dongwon System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon System 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 Dongwon System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon System has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and Dongwon System go up and down completely randomly.
Pair Corralation between Cube Entertainment and Dongwon System
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 0.9 times more return on investment than Dongwon System. However, Cube Entertainment is 1.12 times less risky than Dongwon System. It trades about 0.12 of its potential returns per unit of risk. Dongwon System is currently generating about 0.05 per unit of risk. If you would invest 1,391,000 in Cube Entertainment on August 29, 2024 and sell it today you would earn a total of 189,000 from holding Cube Entertainment or generate 13.59% 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. Dongwon System
Performance |
| Timeline |
| Cube Entertainment |
| Dongwon System |
Cube Entertainment and Dongwon System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and Dongwon System
The main advantage of trading using opposite Cube Entertainment and Dongwon System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, Dongwon System 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 Dongwon System will offset losses from the drop in Dongwon System's long position.| Cube Entertainment vs. ASTORY CoLtd | Cube Entertainment vs. PlayD Co | Cube Entertainment vs. Neungyule Education |
| Dongwon System vs. LG Chemicals | Dongwon System vs. POSCO Holdings | Dongwon System vs. Hanwha Solutions | Dongwon System vs. Lotte Chemical Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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