Correlation Between Cube Entertainment and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and SK Chemicals 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 SK Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and SK Chemicals Co, you can compare the effects of market volatilities on Cube Entertainment and SK Chemicals 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 SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and SK Chemicals.
Diversification Opportunities for Cube Entertainment and SK Chemicals
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cube and 285130 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals 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 SK Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Chemicals has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and SK Chemicals go up and down completely randomly.
Pair Corralation between Cube Entertainment and SK Chemicals
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 1.33 times more return on investment than SK Chemicals. However, Cube Entertainment is 1.33 times more volatile than SK Chemicals Co. It trades about -0.02 of its potential returns per unit of risk. SK Chemicals Co is currently generating about -0.13 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cube Entertainment vs. SK Chemicals Co
Performance |
| Timeline |
| Cube Entertainment |
| SK Chemicals |
Cube Entertainment and SK Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and SK Chemicals
The main advantage of trading using opposite Cube Entertainment and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, SK Chemicals 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 SK Chemicals will offset losses from the drop in SK Chemicals' 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 |
| SK Chemicals vs. LG Chemicals | SK Chemicals vs. POSCO Holdings | SK Chemicals vs. Hanwha Solutions | SK Chemicals vs. Lotte Chemical Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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