Correlation Between Cube Entertainment and Next Entertainment
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and Next 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 Next 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 Next Entertainment World, you can compare the effects of market volatilities on Cube Entertainment and Next 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 Next Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and Next Entertainment.
Diversification Opportunities for Cube Entertainment and Next Entertainment
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cube and Next is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and Next Entertainment World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Entertainment World 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 Next Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Entertainment World has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and Next Entertainment go up and down completely randomly.
Pair Corralation between Cube Entertainment and Next Entertainment
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 0.99 times more return on investment than Next Entertainment. However, Cube Entertainment is 1.01 times less risky than Next Entertainment. It trades about -0.02 of its potential returns per unit of risk. Next Entertainment World is currently generating about -0.03 per unit of risk. If you would invest 1,500,000 in Cube Entertainment on September 12, 2024 and sell it today you would lose (40,000) from holding Cube Entertainment or give up 2.67% 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. Next Entertainment World
Performance |
| Timeline |
| Cube Entertainment |
| Next Entertainment World |
Cube Entertainment and Next Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and Next Entertainment
The main advantage of trading using opposite Cube Entertainment and Next Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, Next 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 Next Entertainment will offset losses from the drop in Next Entertainment'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 |
| Next Entertainment vs. YG Entertainment | Next Entertainment vs. JYP Entertainment | Next Entertainment vs. Cube Entertainment | Next Entertainment vs. FNC Entertainment 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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