Correlation Between Cube Entertainment and ABL Bio
Can any of the company-specific risk be diversified away by investing in both Cube Entertainment and ABL Bio 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 ABL Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cube Entertainment and ABL Bio, you can compare the effects of market volatilities on Cube Entertainment and ABL Bio 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 ABL Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cube Entertainment and ABL Bio.
Diversification Opportunities for Cube Entertainment and ABL Bio
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cube and ABL is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cube Entertainment and ABL Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABL Bio 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 ABL Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABL Bio has no effect on the direction of Cube Entertainment i.e., Cube Entertainment and ABL Bio go up and down completely randomly.
Pair Corralation between Cube Entertainment and ABL Bio
Assuming the 90 days trading horizon Cube Entertainment is expected to generate 0.61 times more return on investment than ABL Bio. However, Cube Entertainment is 1.63 times less risky than ABL Bio. It trades about 0.25 of its potential returns per unit of risk. ABL Bio is currently generating about -0.28 per unit of risk. If you would invest 1,360,000 in Cube Entertainment on August 29, 2024 and sell it today you would earn a total of 220,000 from holding Cube Entertainment or generate 16.18% 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. ABL Bio
Performance |
| Timeline |
| Cube Entertainment |
| ABL Bio |
Cube Entertainment and ABL Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cube Entertainment and ABL Bio
The main advantage of trading using opposite Cube Entertainment and ABL Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cube Entertainment position performs unexpectedly, ABL Bio 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 ABL Bio will offset losses from the drop in ABL Bio's long position.| Cube Entertainment vs. ABOV Semiconductor Co | Cube Entertainment vs. Korea Information Communications | Cube Entertainment vs. Sung Bo Chemicals | Cube Entertainment vs. Lotte Data Communication |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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