Correlation Between Cube Entertainment and Taegu Broadcasting
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and Taegu Broadcasting 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 Taegu Broadcasting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and Taegu Broadcasting, you can compare the effects of market volatilities on Cube Entertainment and Taegu Broadcasting 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 Taegu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and Taegu Broadcasting.
Diversification Opportunities for Cube Entertainment and Taegu Broadcasting
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cube and Taegu is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting 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 Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and Taegu Broadcasting go up and down completely randomly.
Pair Corralation between Cube Entertainment and Taegu Broadcasting
Assuming the 90 days trading horizon Cube Entertainment is expected to under-perform the Taegu Broadcasting. In addition to that, Cube Entertainment is 1.85 times more volatile than Taegu Broadcasting. It trades about -0.01 of its total potential returns per unit of risk. Taegu Broadcasting is currently generating about 0.01 per unit of volatility. If you would invest 88,654 in Taegu Broadcasting on September 12, 2024 and sell it today you would earn a total of 2,846 from holding Taegu Broadcasting or generate 3.21% 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. Taegu Broadcasting
Performance |
| Timeline |
| Cube Entertainment |
| Taegu Broadcasting |
Cube Entertainment and Taegu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and Taegu Broadcasting
The main advantage of trading using opposite Cube Entertainment and Taegu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, Taegu Broadcasting 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 Taegu Broadcasting will offset losses from the drop in Taegu Broadcasting's long position.| Cube Entertainment vs. Mobileleader CoLtd | Cube Entertainment vs. Dongwon Metal Co | Cube Entertainment vs. KT Submarine Telecom | Cube Entertainment vs. Hanjoo Light Metal |
| Taegu Broadcasting vs. YG Entertainment | Taegu Broadcasting vs. JYP Entertainment | Taegu Broadcasting vs. Cube Entertainment | Taegu Broadcasting vs. FNC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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