Correlation Between Cube Entertainment and KHVATEC CoLtd
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and KHVATEC CoLtd 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 KHVATEC CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and KHVATEC CoLtd, you can compare the effects of market volatilities on Cube Entertainment and KHVATEC CoLtd 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 KHVATEC CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and KHVATEC CoLtd.
Diversification Opportunities for Cube Entertainment and KHVATEC CoLtd
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cube and KHVATEC is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and KHVATEC CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KHVATEC CoLtd 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 KHVATEC CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KHVATEC CoLtd has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and KHVATEC CoLtd go up and down completely randomly.
Pair Corralation between Cube Entertainment and KHVATEC CoLtd
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 1.31 times more return on investment than KHVATEC CoLtd. However, Cube Entertainment is 1.31 times more volatile than KHVATEC CoLtd. It trades about 0.02 of its potential returns per unit of risk. KHVATEC CoLtd is currently generating about -0.03 per unit of risk. If you would invest 1,655,000 in Cube Entertainment on September 14, 2024 and sell it today you would lose (12,000) from holding Cube Entertainment or give up 0.73% 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. KHVATEC CoLtd
Performance |
| Timeline |
| Cube Entertainment |
| KHVATEC CoLtd |
Cube Entertainment and KHVATEC CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and KHVATEC CoLtd
The main advantage of trading using opposite Cube Entertainment and KHVATEC CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, KHVATEC CoLtd 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 KHVATEC CoLtd will offset losses from the drop in KHVATEC CoLtd'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 |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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