Correlation Between Cube Entertainment and Global Standard
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and Global Standard 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 Global Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and Global Standard Technology, you can compare the effects of market volatilities on Cube Entertainment and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and Global Standard.
Diversification Opportunities for Cube Entertainment and Global Standard
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cube and Global is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and Global Standard go up and down completely randomly.
Pair Corralation between Cube Entertainment and Global Standard
Assuming the 90 days trading horizon Cube Entertainment is expected to under-perform the Global Standard. But the stock apears to be less risky and, when comparing its historical volatility, Cube Entertainment is 1.25 times less risky than Global Standard. The stock trades about -0.02 of its potential returns per unit of risk. The Global Standard Technology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,576,000 in Global Standard Technology on September 12, 2024 and sell it today you would lose (44,000) from holding Global Standard Technology or give up 2.79% 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. Global Standard Technology
Performance |
| Timeline |
| Cube Entertainment |
| Global Standard Tech |
Cube Entertainment and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and Global Standard
The main advantage of trading using opposite Cube Entertainment and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard'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 |
| Global Standard vs. Cube Entertainment | Global Standard vs. Dreamus Company | Global Standard vs. LG Energy Solution | Global Standard vs. Dongwon System |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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