Correlation Between Cube Entertainment and Naver
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and Naver 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 Naver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and Naver, you can compare the effects of market volatilities on Cube Entertainment and Naver 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 Naver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and Naver.
Diversification Opportunities for Cube Entertainment and Naver
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cube and Naver is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and Naver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naver 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 Naver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naver has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and Naver go up and down completely randomly.
Pair Corralation between Cube Entertainment and Naver
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 1.62 times more return on investment than Naver. However, Cube Entertainment is 1.62 times more volatile than Naver. It trades about 0.03 of its potential returns per unit of risk. Naver is currently generating about 0.01 per unit of risk. If you would invest 1,488,000 in Cube Entertainment on September 14, 2024 and sell it today you would earn a total of 257,000 from holding Cube Entertainment or generate 17.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Cube Entertainment vs. Naver
Performance |
| Timeline |
| Cube Entertainment |
| Naver |
Cube Entertainment and Naver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and Naver
The main advantage of trading using opposite Cube Entertainment and Naver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, Naver 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 Naver will offset losses from the drop in Naver's long position.| Cube Entertainment vs. PlayD Co | Cube Entertainment vs. Neungyule Education | Cube Entertainment vs. Solution Advanced Technology | Cube Entertainment vs. Busan Industrial Co |
| Naver vs. YG Entertainment | Naver vs. JYP Entertainment | Naver vs. Cube Entertainment | Naver 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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