Correlation Between Cube Entertainment and Shinhan Financial
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and Shinhan Financial 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 Shinhan Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and Shinhan Financial Group, you can compare the effects of market volatilities on Cube Entertainment and Shinhan Financial 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 Shinhan Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and Shinhan Financial.
Diversification Opportunities for Cube Entertainment and Shinhan Financial
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cube and Shinhan is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and Shinhan Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Financial 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 Shinhan Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Financial has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and Shinhan Financial go up and down completely randomly.
Pair Corralation between Cube Entertainment and Shinhan Financial
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 2.91 times more return on investment than Shinhan Financial. However, Cube Entertainment is 2.91 times more volatile than Shinhan Financial Group. It trades about 0.34 of its potential returns per unit of risk. Shinhan Financial Group is currently generating about -0.45 per unit of risk. If you would invest 1,378,000 in Cube Entertainment on November 27, 2024 and sell it today you would earn a total of 207,000 from holding Cube Entertainment or generate 15.02% 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. Shinhan Financial Group
Performance |
| Timeline |
| Cube Entertainment |
| Shinhan Financial |
Cube Entertainment and Shinhan Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and Shinhan Financial
The main advantage of trading using opposite Cube Entertainment and Shinhan Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, Shinhan Financial 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 Shinhan Financial will offset losses from the drop in Shinhan Financial's long position.| Cube Entertainment vs. Namkwang Engineering Construction | Cube Entertainment vs. Innowireless Co | Cube Entertainment vs. GS Engineering Construction | Cube Entertainment vs. Keyang Electric Machinery |
| Shinhan Financial vs. Mgame Corp | Shinhan Financial vs. Vissem Electronics Co | Shinhan Financial vs. DAEDUCK ELECTRONICS CoLtd | Shinhan Financial vs. GAMEVIL |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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