Correlation Between Hanjoo Light and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and Cube 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 Hanjoo Light and Cube Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjoo Light Metal and Cube Entertainment, you can compare the effects of market volatilities on Hanjoo Light and Cube 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 Hanjoo Light with a short position of Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and Cube Entertainment.
Diversification Opportunities for Hanjoo Light and Cube Entertainment
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanjoo and Cube is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube Entertainment and Hanjoo Light 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 Hanjoo Light Metal are associated (or correlated) with Cube Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cube Entertainment has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and Cube Entertainment go up and down completely randomly.
Pair Corralation between Hanjoo Light and Cube Entertainment
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to under-perform the Cube Entertainment. In addition to that, Hanjoo Light is 1.24 times more volatile than Cube Entertainment. It trades about -0.1 of its total potential returns per unit of risk. Cube Entertainment is currently generating about -0.03 per unit of volatility. If you would invest 2,450,000 in Cube Entertainment on August 28, 2024 and sell it today you would lose (941,000) from holding Cube Entertainment or give up 38.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. Cube Entertainment
Performance |
| Timeline |
| Hanjoo Light Metal |
| Cube Entertainment |
Hanjoo Light and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and Cube Entertainment
The main advantage of trading using opposite Hanjoo Light and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, Cube 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 Cube Entertainment will offset losses from the drop in Cube Entertainment's long position.| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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