Correlation Between Cube Entertainment and BNK Financial
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and BNK 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 BNK 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 BNK Financial Group, you can compare the effects of market volatilities on Cube Entertainment and BNK 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 BNK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and BNK Financial.
Diversification Opportunities for Cube Entertainment and BNK Financial
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cube and BNK is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and BNK Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNK Financial Group 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 BNK Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNK Financial Group has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and BNK Financial go up and down completely randomly.
Pair Corralation between Cube Entertainment and BNK Financial
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 2.39 times more return on investment than BNK Financial. However, Cube Entertainment is 2.39 times more volatile than BNK Financial Group. It trades about 0.42 of its potential returns per unit of risk. BNK Financial Group is currently generating about -0.19 per unit of risk. If you would invest 1,378,000 in Cube Entertainment on November 28, 2024 and sell it today you would earn a total of 316,000 from holding Cube Entertainment or generate 22.93% 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. BNK Financial Group
Performance |
| Timeline |
| Cube Entertainment |
| BNK Financial Group |
Cube Entertainment and BNK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and BNK Financial
The main advantage of trading using opposite Cube Entertainment and BNK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, BNK 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 BNK Financial will offset losses from the drop in BNK Financial's long position.| Cube Entertainment vs. LG Household Healthcare | Cube Entertainment vs. Korea Industrial Co | Cube Entertainment vs. Sangsangin Investment Securities | Cube Entertainment vs. Eagon Industrial Co |
| BNK Financial vs. Korean Drug Co | BNK Financial vs. Sam Yang Foods | BNK Financial vs. Green Cross Medical | BNK Financial vs. DB Insurance 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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