Correlation Between Cube Entertainment and YG Entertainment
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and YG Entertainment 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 YG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and YG Entertainment, you can compare the effects of market volatilities on Cube Entertainment and YG Entertainment 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 YG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and YG Entertainment.
Diversification Opportunities for Cube Entertainment and YG Entertainment
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cube and 122870 is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and YG Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YG Entertainment 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 YG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YG Entertainment has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and YG Entertainment go up and down completely randomly.
Pair Corralation between Cube Entertainment and YG Entertainment
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 1.04 times more return on investment than YG Entertainment. However, Cube Entertainment is 1.04 times more volatile than YG Entertainment. It trades about -0.01 of its potential returns per unit of risk. YG Entertainment is currently generating about -0.04 per unit of risk. If you would invest 2,145,000 in Cube Entertainment on September 2, 2024 and sell it today you would lose (507,000) from holding Cube Entertainment or give up 23.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cube Entertainment vs. YG Entertainment
Performance |
| Timeline |
| Cube Entertainment |
| YG Entertainment |
Cube Entertainment and YG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and YG Entertainment
The main advantage of trading using opposite Cube Entertainment and YG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, YG Entertainment 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 YG Entertainment will offset losses from the drop in YG Entertainment's long position.| Cube Entertainment vs. Lindeman Asia Investment | Cube Entertainment vs. Pureun Mutual Savings | Cube Entertainment vs. Hanjoo Light Metal | Cube Entertainment vs. DSC Investment |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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